Puerto Rico Continues To Stabilize

The Puerto Rico Government Development Bank’s Economic Activity Index (EAI) was flat from January to February this year, showing that the worst of the commonwealth’s recession is hopefully behind it. The EAI level for this February is still down 2.5% from February 2013, but that is an improvement from the 3 – 4% annual drops that were common during 2H13, and year-on-year comparisons are expected to improve by the end of this year.

“The relative stability in Puerto Rico's economic indicators in recent months should help to allay fears of an accelerating decline in the underlying economy,” write Sterne Agee analysts Todd L. Hagerman and Robert Greene in a March 31 report. “The litmus test for the...