WASHINGTON (Sputnik) — Puerto Rico needs to restructure its unsustainable debt obligations that are slowing economic growth and hindering the provision of healthcare and safety services, the Working Group for the Fiscal and Economic Recovery of Puerto Rico said in a report on Wednesday.
On August 3, Puerto Rico defaulted on its debt for the first time in history, repaying only $628,000 of $58 million that was due. In total, Puerto Rico owes creditors $73 billion.
"Even if the Commonwealth [of Puerto Rico] were able to achieve economic growth, the estimated benefit of such growth still would not be enough to allow the Commonwealth to pay all of its contractual debt service as currently scheduled," the report said.
A "voluntary adjustment" of the terms of Puerto Rico’s debt, the report claimed, is the most effective way for creditors to maximize the amount it can recover.
The continued deterioration in delivering these services, according to the report, will adversely affect Puerto Rico’s economic prospects while eroding its tax base.
The US federal government also needs to change tax policies and healthcare funding limitations to ensure Puerto Rico has the ability to meet its debt obligations, the report argued.
The White House has previously stated it has no plans to bail out Puerto Rico.
