In brief

The governor, Pedro Pierluisi of the Partido Nuevo Progresista (PNP), lacks a majority in the bicameral Legislative Assembly, sustaining governability challenges. He will face an internal PNP challenge to his bid for re-election in November 2024 from a rival, Jenniffer González. Given the opposition's weakness, either would stand a good chance of winning another four-year term for the PNP, assuming that the leadership contest does not cause the party to split. Mr Pierluisi faces the policy challenges of guiding reconstruction efforts after various natural disasters (hurricanes in 2017 and 2022, and seismic activity in 2020), but will have considerable US federal assistance for these efforts. EIU expects economic growth of 3% in the 2023/24 (July-June) fiscal year and 1.5% in 2024/25, affected by the cycle on the US mainland, but buoyed by federal aid. Looking further ahead, the economy will eventually resume its secular decline once federal support for reconstruction diminishes.