Puerto Rico in 2025: Navigating Economic Recovery and Social Transformation

8 September 2025 Economics

A Territory at a Critical Juncture

Puerto Rico stands at a critical juncture in its development as it enters a new four-year period. According to the latest “Perspectivas” publication by Estudios Técnicos Inc., the island’s trajectory through 2029 will be shaped by the interaction of global economic trends, demographic shifts, and policy decisions.

Economic Recovery and Federal Support

The Biden-Harris Administration has implemented a comprehensive approach to support Puerto Rico’s economic recovery, addressing the island’s unique challenges. This is particularly crucial given the territory’s severe fiscal crisis, which began with a $70 billion bankruptcy in 2016.

Recent developments include the Fifth Amended Plan of Adjustment (POA) for the Puerto Rico Electric Power Authority (PREPA), which reduces debt by almost 80% to $2.6 billion. The plan includes provisions for rate reduction and pension support.

Infrastructure and Environmental Challenges

Climate change remains a critical issue for Puerto Rico. Economic projections suggest the island could face losses of up to $379 billion by 2050 due to climate-related damages. Rising sea levels, extreme weather events, and coastal erosion pose significant risks to infrastructure and public safety.

Demographic and Social Transitions

By 2030, nearly 30% of the island’s residents will be older than 65, raising concerns about workforce sustainability, healthcare services, and retirement funding. The situation is further complicated by low birth rates and continued migration to the U.S. mainland.

Looking Ahead

Despite these challenges, Puerto Rico is actively seeking new opportunities for growth. Government officials are working to attract international companies to relocate their manufacturing plants to the island, where they would be exempt from tariffs. This initiative could provide a significant boost to Puerto Rico’s economy as it emerges from bankruptcy and works to overcome infrastructure challenges.