Puerto Rico seeks private investment to counteract austerity

SAN JUAN — Economists are warning that Puerto Rico needs to attract investors and stimulate its economy to offset austerity measures they say will deepen a decade-long recession.

The warning came during a meeting held on yesterday by a federal control board that oversees the island's finances.

Economists said that a recently approved fiscal plan could shrink Puerto Rico's economy by 4 percent. They said the island needs to reduce its power bills and regain access to the capital markets amid multimillion-dollar defaults, but warned that the benefits of planned infrastructure and tax reforms will not be seen for five to 10 years.

Economist Gustavo Velez said Puerto Rico needs up to $8 billion in private sector investment a year to help pull the island out of its crisis.