March 18 Moody's Investors Service said on
Monday that Puerto Rico's budget gap has doubled since December,
when the Wall Street credit agency cut its credit rating for the
Caribbean island to near-junk bond status.
"Since then, the commonwealth's underperforming general fund
revenues, in conjunction with higher than estimated expenses,
has opened a mid-year budgetary gap and increased the estimated
fiscal 2013 structural imbalance from $1.1 billion to almost
$2.2 billion, or 22 percent of the revised budget," Moody's said
in a written commentary.
Despite moves by the U.S. commonwealth's new government to
step up tax revenues, Moody's said, "The increased structural
imbalance makes it clear that Puerto Rico's fiscal difficulties
are not over."
In December, Moody's downgraded Puerto Rico's general
obligation rating to Baa3 with a negative outlook, with its
analysts pointing to a weak retirement system and few prospects
for significant improvements in government finances and the
Another credit agency, Standard & Poor's, on Wednesday
reduced its rating for Puerto Rico, a big issuer of municipal
bonds, to near-junk status.