Financial conditions for consumers are worsening, Estudios Técnicos says

The Consumer Financial Fragility Index (IFFC by its initials in Spanish) compiled by economic research firm Estudios Técnicos Inc. (ETI) reveals a worsening in consumers’ financial condition beginning in the first quarter of 2023, as the index increased from 35% to 49% in the third quarter of 2024.

Economist Leslie Adames, director of ETI’s Economic Analysis and Policy Division, highlighted that “consumers in Puerto Rico transitioned from an environment of extreme financial fragility during 2000 to moderate financial fragility in recent years. The index peaked at 78% in the second quarter of 2020 but significantly improved in subsequent quarters, averaging 39% between the first quarter of 2021 and the third quarter of 2023.”

Adames attributed the decrease in consumer financial fragility over that period to the injection of over $16 billion in federal fiscal stimulus funds during the COVID-19 pandemic, labor market recovery, and the stabilization of consumer loan delinquency rates. The latter was supported by channeling part of the non-recurring federal stimulus funds to pay off non-current debts.