(Reuters) - Puerto Rico's Government Development Bank (GDB) has warned the government would likely face a shutdown in three months because of a lack of liquidity and said a financing deal currently appears unlikely, according to a letter sent to lawmakers.
Puerto Rico faces a fiscal crisis and is trying to raise $2.95 billion in new financing while pushing through unpopular tax reforms such as hiking the value-added tax and increasing a levy on crude oil to help pay for it.
Those efforts face strong opposition from Puerto Rico's lawmakers, as well as the general public.
"A government shutdown is very probable in the next three months due to the absence of liquidity to operate," the officials said. "The likelihood of completing a market transaction to finance the government's operations and keep the government open are currently remote."
The letter, dated April 21, was sent to Governor Alejandro Padilla, as well as the heads of Puerto Rico's Senate and House. It was signed by the government's fiscal team, including the head of the GDB and the Treasury Secretary.
It also marks a new tone of urgency from officials who have up to now remained publicly upbeat about the prospects for getting a financing deal done by the middle of May.