Accordingly, market rates are higher than they would be in normal conditions given the monetary impulse, because they are also affected by the risk assessment of operations and, in the current juncture, a higher premium is being tagged on sectors that are more exposed to the economic downturn. In addition, lending has slowed and, although somewhat less restrictive marginally, March’s Survey on Economic Conditions, plus additional information, reveal that high requisites are in force for bank lending, and consumer demand has fallen. The macroeconomic scenario A corollary to the change of global macroeconomic scenario has been the significant deterioration of expectations combined with increased uncertainty about the future unfolding of the world economy. Income prospects for firms and households have become more uncertain, while problems in international financial markets could have been resolved faster to clear the picture on the true solvency of various financial institutions at the global level. The aforesaid factors have naturally increased the risks associated to economic activities and to decision-making processes, contributing to the sharp reduction in expenditure by the end of 2008 and to the revision of consumption, investment and production decisions around the globe. This factor may be the culprit of a large share of the fall in the level of domestic demand in Chile, much larger than the fall in GDP, which cannot be fully explained by movements in the usual macroeconomic variables.
These meetings help me get a more complete picture of economic conditions on the Island and a fuller understanding of the major issues and concerns. This is the third time we have visited Puerto Rico in the past five years. Yesterday, I met with Governor-elect Rosselló to discuss the transition into his new role and the key challenges for his upcoming term. I also spent time with members of El Colaboratorio, a shared workspace organized by the Foundation for Puerto Rico. I attended a roundtable discussion with local businesses and spoke with former and current members of several of the New York Fed’s advisory councils. Earlier this morning, I met with the heads of a number of financial institutions and the University of Puerto Rico’s interim president, Celeste Freytes. Following this visit, I will meet with the leadership from Parallel18, an economic development initiative that attracts early-stage, highpotential startups to Puerto Rico. Finally, I will join the leadership of the Boys and Girls Clubs of Puerto Rico for a discussion on the organization’s initiatives and a site visit to one of the clubs to learn about workforce development programs and youth services. As we all know, the Commonwealth of Puerto Rico has been through a very rough 10 years. The economy has been in a long slump that could easily be called a depression. Residents have endured a terrible drought, periodic blackouts and a fiscal crisis. I don’t need to elaborate on all of the struggles Puerto Rico continues to face.