Puerto Rico revises fiscal and reform plan; U.S. Treasury Secretary urges Congress to pass legislation to aid country's financial crisis

Puerto Rico's financial situation is getting worse and the government recently announced that they are revising a fiscal and reform plan. U.S. Treasury Secretary also urged the Congress to pass legislation in order to help Puerto Rico in its recent financial crisis.

Puerto Rico is currently struggling with $72 billion of public debt and is seeking to access a bankruptcy mechanism, according to ABC News. The government announced that the deficit is currently projected to be at $16 billion over the next five years, $2 billion higher than the $14 billion forecast in September.

The creditors also requested to extend its projections to another five years which predict deficit to grow to $24 billion by 2025. According to Bloomberg, the gap is partially based in the lower than anticipated revenue collections for the fiscal year.

Moreover, U.S. Treasury Secretary Jacob J. Lew urged the Congress to pass legislation in March to help in Puerto Rico's financial crisi. According to US News, Lew made his request through a letter to U.S. House Speaker Paul Ryan with which he also announced that he is to go on a trip to the island to talk to its government officials and business leaders regarding the state of their economy.

"Although there are many ways this crisis could escalate further, it is clear that Puerto Rico is already in the midst of an economic collapse. It is time for Congress to act to provide order to a chaotic and worsening situation", Lew wrote.

Lew is to discuss with Puerto Rico's government officials about the territorial bankruptcy regime proposed by President Barrack Obama's administration that would allow Puerto Rico's government to restructure its debt and impose oversight on finances among many others.

The Puerto Rican government has applied measures that aim to maintain liquidity including deferring payments to suppliers and withholding millions of tax refunds. However, Secretary of State Victor Suarez stated that continuing such measures are not sustainable and will not help alleviate the financial crisis that the government is currently facing. 

Tags

Puerto Rico, Puerto Rico financial status, Puerto Rico debt, Puerto Rico economy, U.S. Treasury Secretary Jacob J. Lew, Puerto Rico public debt, Puerto Rico fiscal crisis

© 2023 Lawyer Herald All rights reserved. Do not reproduce without permission.