In an effort to continue to shed light on the important issues, last week we published in our Liberty Street Economics blog a five-part series entitled “Restoring Economic Growth in Puerto Rico.” Some important conclusions emerged from our analysis, and I want to emphasize those today. First and foremost, Puerto Rico’s current level of public debt is unsustainable. Achieving fiscal sustainability requires real reforms and a significant adjustment to the Commonwealth’s debt burden, as Congress and the Administration have recognized. To illustrate this point, our analysis demonstrates that even if growth were to return to between 2 and 2.5 percent per year – an optimistic scenario – debt as a share of GDP would continue to rise under the 2  BIS central bankers’ speeches  current fiscal balance and debt structure. This underscores that the current regime is not sustainable. Second, while fiscal reform is definitely needed, restoring economic growth remains a crucial ingredient to achieving a sustainable fiscal regime. Puerto Rico slipped into recession in 2006, and a decade later a recovery has yet to materialize. Any fixed level of debt will grow even more burdensome if the economy is shrinking. Consequently, this long deep recession has exacerbated the Island’s fiscal woes. Much of last week’s analysis focused on a key contributor to economic growth – the labor force – so let me point out a few conclusions that I drew from that work. Puerto Rico’s outmigration remains an important concern, and is both a cause and an effect of the economic decline.
William C Dudley: “Remarks at the New York Fed’s Economic Press Briefing on the Regional Economy” Opening remarks by Mr William C Dudley, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Economic Press Briefing on the Regional Economy, Federal Reserve Bank of New York, New York City, 18 August 2016. *  *  *  Jaison Abel, Jason Bram, Hunter Clark, Giacomo De Giorgi, Richard Deitz, Jack Gutt, Andrew Haughwout and Joseph Tracy assisted in preparing these remarks. Good morning and welcome to the New York Fed’s Economic Press Briefing. I am pleased to have this opportunity to speak with the journalists covering our region. You are an important communication channel to the people in our District. This morning I want to focus on economic conditions in our region, giving particular attention to job growth. I also want to discuss our ongoing work on Puerto Rico. As always, what I have to say reflects my own views and not necessarily those of the Federal Open Market Committee or the Federal Reserve System. The New York Fed is deeply committed to serving our region. This commitment manifests itself in several ways. We produce business surveys and local economic indexes to help our constituents track regional economic conditions. My staff writes papers and blog posts on economic issues important to our region. We meet with a number of advisory boards comprised of community and business leaders.