Govt: We have turned corner
Bermuda is on the road to economic recovery — despite the loss of more than 1,100 jobs, according to the latest Government figures.
Bermuda College economics lecturer Craig Simmons said that there was evidence that Bermuda was becoming better value for money in terms of international business and tourism.
He added: “That’s one thing we need for recovery — to bring your unit costs down.
And Mr Simmons said that the most recent retail sales figures were up, after adjustment for inflation.
He added: “That suggests we are in the early stages of recovery.”
Mr Simmons was speaking after Department of Statistics figures for August last year showed that more than 1,100 jobs had been lost compared to the jobs total in 2012.
Figures showed there were 34,277 jobs counted then, compared to 35,433 in 2012.
The number of jobs in construction dropped fell by five percent — a loss of 121 filled posts, while the number of jobs in international business fell by three percent or 110 jobs.
But Mr Simmons said: “If history is any guide, we know that after a recession caused by a financial crisis, recovery is rather slow.
“We are following in the footsteps of previous recessions caused by a financial crisis.”
Premier Craig Cannonier said on Tuesday said that Government policies had slowed the rate of job losses and that the figures did not represent a complete picture for the whole of last year.
He added that Bermuda was “not out of the woods, but we’re getting there.”
Finance Minister Bob Richards said that the Island was “turning a corner” and that Government would continue to work end the recession.
But Mr Simmons said that the ruling OBA had set itself against boosting the economy through Government spending in favour of bringing down the country’s $1 billion-plus deficit, while major tax cuts had been ruled out and the US dollar linked Bermuda dollar meant that the fixed exchange rate ruled out fiscal policy as a tool.
Mr Simmons added that tax cuts for lower income earners had been shown to generate more spending, which aided recovery.
But he said: “In many ways, the Government is out of firepower. It seems to me there isn’t much Government can do other than be a cheerleader.”
And he added that banks needed to loosen off their tough post-recession lending policies to help boost the economy.
Mr Simmons said: “The banks need to be held accountable for the problem they created and, given that, they should be part of the solution.”
Charles Dunstan, head of the Construction Association of Bermuda, said there were signs the sector was picking up.
He added: “There does seem to be a busier feel about the place over the last three months.”
And Mr Dunstan said: “Hopefully, these early signs in 2014 are indicative of a general upturn — but I would be surprised if that is sustainable through the summer, at least until some of these larger hospitality projects get off the ground.”
Bermuda Chamber of Commerce president Kristi Grayston added: “The continuing loss of jobs from the Bermuda economy is a definite concern to the local business community.
“A key concern is the loss of jobs held by expatriates — who leave the Island when they lose their jobs.
“This has had a huge effect on local businesses selling goods and services to the resident population.
“What we need to reverse this trend is a growth in our population — we need to attract more businesses to the Island in order to create jobs and work to keep those expatriates who are here from moving their businesses elsewhere.”
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