Puerto Rico's economy posted a robust turnaround in 2023, with real gross domestic product rising 3.0 percent after shrinking 2.1 percent in 2022, the U.S. Bureau of Economic Analysis reported.
Exports were the primary engine of growth, climbing 6.4 percent in real terms. The pharmaceutical and organic chemicals sector — long a cornerstone of the island's manufacturing base — led the way with a 5.9 percent increase, while medical and scientific equipment exports jumped 8.0 percent. Services exports also strengthened, with travel services surging 15.1 percent as inbound air passengers rose nearly 19 percent, according to the Economic Development Bank for Puerto Rico.
Consumer spending on the island grew a more modest 1.2 percent. Health care services and recreation helped drive a 4.0 percent increase in services spending, but goods consumption fell 0.8 percent. Food and beverage spending declined 6.2 percent as rising prices outstripped nominal spending, underscoring the inflation squeeze many Puerto Rico residents continue to face.
Government spending rose 4.8 percent, buoyed by continued disbursements of federal disaster recovery funds tied to Hurricanes Irma and Maria, a series of earthquakes, and Hurricane Fiona. Major infrastructure projects — including work on the power grid, water systems, and roads — drove much of the increase. Private fixed investment also grew 3.8 percent.
The data suggests Puerto Rico's economy has found footing after years of fiscal crisis and natural disasters, though challenges remain. The island's dependence on a narrow set of export industries and its vulnerability to inflation in basic necessities like food mean the recovery, while encouraging, is unevenly felt across the population.
