Puerto Rico is expected to post a cumulative budget surplus of $15.2 billion through 2035 as $123.5 billion of federal disaster funds and coronavirus relief money helps boost the local economy, according to the commonwealth’s latest fiscal plan and reported by Bloomberg. That surplus is crucial because the island’s financial oversight board anticipates using the money to cover Puerto Rico’s debt-service costs. The commonwealth would begin to repay principal and interest on its bonds as soon as January 2022 if it’s able to restructure its debt this year as part of its bankruptcy, according to the plan posted on its website. While the estimate pushes out anticipated deficits by four years to fiscal 2036, Puerto Rico Governor Pedro Pierluisi and the island’s legislature will need to implement structural reforms to realize the surpluses and continue economic growth after the federal cash runs out, Natalie Jaresko, the board’s executive director, said Friday during a meeting where the panel voted unanimously to approve the fiscal plan. The multi-year proposal serves as a framework for Puerto Rico’s yearly operating budgets. For long-term growth, the fiscal plan includes labor and welfare reforms to boost workforce participation, improvements to K-12 education, reducing hurdles for starting and sustaining a business, and making electricity on the island more reliant and affordable. If enacted, those changes could increase revenue by nearly $31 billion from fiscal 2022 through fiscal 2051, according to the plan.
