Puerto Rico remains dark as damage assessments begin

Author: , Post Date: September 25, 2017
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HOW WILL THIS AFFECT PUERTO RICO’S ECONOMY?

Even with financial assistance that the island will receive from the federal government, Hurricane Maria will mean more pain for Puerto Rico’s already fragile finances. Tax collections will drop, and Puerto Rico’s tourism industry “will not recover for some time,” according to James Eck, a vice president with the credit-rating agency Moody’s.

Other areas of the country, like Texas and Florida, are also reeling from hurricane damage, “but they could go to a gas station that had power and a store that had refrigerated food,” said David Kotok, chairman and chief investment officer of Cumberland Advisors, an investment firm. “This is a massive shock in Puerto Rico.”

With no power, more young workers may leave Puerto Rico for better opportunities elsewhere. That would further a vicious cycle already underway, where fewer workers means less tax revenue, which hurts the economy, which encourages even more people to leave. Puerto Rico’s population dropped by 8 percent from 2010 through the middle of 2016.

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