Puerto Rico’s Zika Surge Will Hurt Island Tourism, Moody’s Saysby
Epidemic likely to worsen an already shrinking economy
Island has nearly 4,700 reported Zika cases, CDC says
A surge of Zika cases in Puerto Rico may harm the island’s already declining economy and hurt its tourism industry, according to Moody’s Investors Service.
The number of Puerto Rico residents who acquired the infection locally has increased since April, with 4,666 reported cases, as of July 27, according to the Centers for Disease Control and Prevention. Zika’s spread on the island is a credit negative, Emily Raimes, an analyst at Moody’s in New York, wrote in a report Thursday. Puerto Rico’s economy has shrunk in the past decade and is forecast to decline by 2 percent in fiscal 2017.
“As the epidemic continues, it is likely to worsen an already declining economy, which suffers from low labor force participation, high unemployment rates, a declining population and very low per capital income,” Raimes said. “Tourism, one of the economic drivers of the island, will be hurt, and population loss owing to outmigration will probably accelerate.”
Zika is spread by certain mosquitoes. Most infected people experience mild symptoms for several days. The CDC recommends that pregnant women or those trying to conceive avoid traveling to Puerto Rico because Zika can cause microcephaly, a birth defect that limits brain growth.
Puerto Rico has defaulted on more than $1 billion of debt since Governor Alejandro Garcia Padilla said last year the commonwealth could no longer afford to make its bond payments and cover essential services. Moody’s rates the commonwealth Caa3, the third-lowest non-investment grade.