Puerto Rico

The Government Development Bank for Puerto Rico’s economic activity index increased slightly to 127.3 in March, as gasoline consumption fell for the second month in a row. Year over year, March’s 127.3 reading is down 1.8% from 129.7 in 2010. That is the smallest year-over-year decline since August 2007, according to the GDB’s March EAI report.

Puerto Rico’s general fund revenues from July through March total $5.05 billion, just $11 million more than budgeted estimates.

Puerto Rico Gov. Luis Fortuño Tuesday evening released a $9.26 billion budget proposal for fiscal 2012 that will use $285 million of sales tax borrowing to help close a $610 million ­deficit.

SAN JUAN — Puerto Rico plans to issue $295 million of new-money general obligation debt by June 30, its first such borrowing in more than two years.

Puerto Rico officials expect the island’s economy will again contract in fiscal 2011, a reversal from earlier projections that gross domestic product would increase this year at a modest rate of 0.4%.

José Otero-Freiria was only into his second week as the new debt-financing chief at the ­Government Development Bank for Puerto Rico when the commonwealth headed to the market with a general obligation refinancing deal.

Standard & Poor’s cited better-than-expected excise-tax collections in boosting Puerto Rico’s $9.2 billion of general obligation debt to BBB from BBB-minus.

Puerto Rico wants to transform more than 70 acres of rundown waterfront and industrial space in San Juan into a mixed-use community anchored by a major ­destination hotel to generate tourism in the area.

When Luis Fortuño became governor of Puerto Rico in January 2009, he promised to reduce spending, cut the government’s payroll, end structural deficits, and set realistic revenue projections.

Juan Carlos Batlle, managing director of Santander Securities Corp. will succeed Carlos Garcia as president of the Government Development Bank for Puerto Rico, effective March 2.