Puerto Rico's real GDP drops 2.5% in 2022 after 4.1% rise in 2021; increase in imports, led by 21.7% rise in pharmaceuticals and organic chemicals, partially to blame: BEA

Real gross domestic product (GDP) for Puerto Rico decreased 2.5 percent in 2022 after increasing 4.1 percent in 2021 (table 1.3), according to statistics released today by the U.S. Bureau of Economic Analysis. The decrease in real GDP in 2022 reflected an increase in imports—which are a subtraction item in the calculation of GDP—as well as decreases in private fixed investment and exports (chart 1). Personal consumption expenditures, private inventory investment, and government spending increased.

Real imports increased 7.3 percent (table 3.3), reflecting an increase in imports of goods. The increase was led by pharmaceuticals and organic chemicals, which increased 21.7 percent. This growth in imports of pharmaceuticals and organic chemicals, which are primary inputs of the pharmaceutical manufacturing industry, outpaced the growth in that industry’s exports.

Real private fixed investment (PFI) decreased 4.6 percent (table 4.2.3). Investment in intellectual property products decreased 24.7 percent, while investment spending on equipment and structures increased 4.3 percent and 2.1 percent, respectively.

• For Puerto Rico, investment in intellectual property products largely consists of research and development spending by computer service providers and other businesses.
• The leading contributor to the increase in investment in equipment was information processing equipment (table 4.2.4), which includes purchases of medical instruments by businesses.
• The leading contributor to the increase in structures was nonresidential structures, reflecting ongoing projects to expand renewable energy generation.

Real exports decreased 0.3 percent (table 3.3), reflecting a decrease in exports of services that was partly offset by an increase in exports of goods. Exports of services decreased 14.6 percent, while exports of goods increased 2.9 percent.

• The leading contributor to the decrease in exports of services was “other services” (table 3.4), which includes computer services. This decrease was partly offset by exports of travel services, which includes purchases of goods and services by tourists and other nonresidents in Puerto Rico.
• The leading contributor to the increase in exports of goods was pharmaceuticals and organic chemicals, which increased 2.6 percent (table 3.3).

Real personal consumption expenditures (PCE) increased 2.2 percent (table 2.3). PCE services increased 5.5 percent, while spending on PCE goods decreased 0.7 percent.

• The increase in PCE services reflected widespread growth. The leading contributor to the increase was “other services” (table 2.4), which includes recreation services, such as live entertainment.
• The leading contributor to the decrease in PCE goods was motor vehicles and parts. According to statistics published by the Economic Development Bank for Puerto Rico, unit sales of motor vehicles decreased 4.3 percent in 2022 after increasing 35.9 percent in 2021.

Real private inventory investment increased (table 1.2). The largest contributor to the increase was the manufacturing sector.

Real government spending increased 0.4 percent (table 1.3), reflecting increases in investment spending by federal, central, and municipal governments (table 4.1.3). The increases in government investment spending reflected growth in disbursements of federal funds for disaster recovery activities associated with Hurricanes Irma and Maria in 2017, earthquakes in 2019 and 2020, and Hurricane Fiona in 2022.

Estimates of GDP and its components for 2018–2021 that were released on July 31, 2023, have been revised to incorporate updates to source data including the following:

• Newly available financial data for companies from the Puerto Rico Department of State online Registry of Corporations and Entities and from the Puerto Rico Department of Economic Development and Commerce (DDEC).
• Newly available and updated tabulations of tax returns for taxable corporate businesses and proprietors from the Puerto Rico Department of Treasury.
• Updated information from the Puerto Rico Planning Board for business inventories and sales, balance of payments, and construction spending.
• Newly available audited government financial statements and unaudited operating and budget statements for the Commonwealth government, its component units, and municipal governments.
• Newly available Informe sobre la encuestra de inversión en investigación y desarrollo en Puerto Rico 2022 (Report on the Survey of Investment in Research and Development in Puerto Rico in 2022) from DDEC.
• Updated tabulations of declared sales by industry from the monthly Sales and Use Tax Return from the Puerto Rico Department of Treasury.
• Updated data on shipments from the joint U.S. Census Bureau and BEA International Trade in Goods and Services (FT900) report.
• Newly available Capital Cost and Performance Characteristics for Utility-Scale Electric Power Generating Technologies report from the U.S. Energy Information Administration.

The revised estimates exhibit a pattern of inflation-adjusted GDP growth similar to the previously published estimates (table 1).

Due to lags in the availability of key data sources used in the estimation of Puerto Rico GDP, the statistics presented today for 2022 are preliminary estimates. For example, currently available data sources for central government spending and private inventory investment do not cover all of calendar year 2022. As additional source data become available, BEA will incorporate the information and will release updated estimates once a year.

For more information on the data sources underlying these estimates, see Summary of Methodologies: Puerto Rico Gross Domestic Product.