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Revised Puerto Rico fiscal plan taps federal budget money

NEW YORK (Reuters) – Puerto Rico Governor Ricardo Rossello launched a revised fiscal plan on Tuesday that may use $18 billion of extra money from the U.S. federal budget to remodel the bankrupt island’s deficit right into a $three.four billion surplus inside six years.

The injection of latest funding from the federal budget, enacted earlier this month, will let the U.S. territory shift its restoration plan once more and make modifications requested by its federally appointed monetary oversight board.

The new blueprint got here after Hurricanes Irma and Maria devastated Puerto Rico in September and altered its financial outlook.

Before the storms, the restoration plan had projected an almost $four billion surplus by means of 2021. But after the hurricanes, the federal government forecast a $three.four billion hole for a similar interval that might not permit any reimbursement of the island’s debt.

Now, the island’s budgetary well being would rise once more to a projected $three.four billion surplus by 2023 below the brand new estimates, because the destruction can be bringing catastrophe assist.

Altogether, the revised plan incorporates $21 billion of personal insurance coverage proceeds and assumes $49.1 billion of catastrophe assist from the federal authorities.

Puerto Rico is struggling to get well from Hurricane Maria – its worst storm in 90 years – whereas additionally navigating the most important authorities chapter in U.S. historical past, with $120 billion in mixed bond and pension debt.

The island can be anticipated to lose one other 20 p.c of its inhabitants over the six-year interval, the revised plan stated.

Puerto Rico’s monetary oversight board informed Rossello earlier this month to create room within the budget for an emergency fund and so as to add extra element on labor and different reforms.

The revised fiscal plan creates an annual reserve of $130 million and a $400 million funding for infrastructure upkeep and improvement.

The board is anticipated to judge Rossello’s revised plan within the coming weeks and, after a public listening to, decide whether or not to certify it.

Separately on Monday, the oversight board appointed Citigroup Global Markets Inc as lead funding banking advisers for the restructuring and privatization of the Puerto Rico Electric Power Authority, or PREPA, its electrical utility.

Reporting by Hilary Russ; Editing by Daniel Bases and Jonathan Oatis

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