The surplus of payments, one of the main indicators of Bermuda's strong economy, has slumped by 31.5 percent, according to Bermuda Monetary figures released yesterday.

For the second quarter of this year the current account surplus stood at $74 million -- a massive drop on the same period last year when it stood at $108 million.

This represents a drop of more than 33 percent for the first six months for this year compared to last. In the first six months of 1999 the surplus stood at $125 million, this year it had fallen to $83 million in the same period.

The BMA said in its commentary published with the figures: "Provisional estimates for the second quarter of 2000 recorded a surplus on current account of $74 million, substantially higher than the figure for the previous quarter, although below the level of the corresponding period of 1999.'' Payments in the second quarter of 2000 increased by $35 million or 9.8 percent to $392 million compared to the same period in 1999, and receipts in the second quarter of this year were virtually unchanged compared to the second quarter of 1999.

The import of merchandise increased by $20 million or nearly 12 percent in the same quarter, from $167 million to $187 million. And exports rose from $15 million to $20 million -- an increase of a third.

But this left the net balance of trade in a larger deficit, increased by ten percent, from $152 million to $167 million.

The biggest change was in the receipts for shipping and transportation, which left a net balance change of 27 percent from a deficit of $26 million to a deficit of $19 million.

The second largest percentage change was in other goods and services income which fell from minus $26 million to minus 19 million.

The amount of investment income fell by 13 percent from $53 million to $40 million.

The amount made by international business, however was up by $3 million or two percent, from $165 million to $168 million for the same quarter this year.

And there was good news from the BMA, which reported the number of international businesses incorporated in Bermuda shot up by more than 40 percent in the second quarter of 2000.

The number of exempted companies for the quarter stood at 482 -- up 41 percent on the same period last year when the figure was 340.

And the number of exempted partnerships has quadrupled from eight last year to 39 this year.

The number of new local companies has risen by 62 percent, with 60 companies having applications approved, compared to 37 for the same quarter last year.

The total number of applications approved, of companies, partnerships and permits, for the quarter rose by 50 percent from 400 in 1999 to 602 in 2000.

The capital and financial account, which is made up of capital transfers, long-term investment and short-term investment, recorded an estimated net outflow of $47 million in the second quarter of 2000. This figure is up 38 percent on the outflow of $76 million in the same quarter in 1999.

This was due to net long-term investment outflow of $35 million partly from steady investment overseas which helped balance out the continuing inflows of foreign capital.

It is also affected by the net short-term investment outflow of $12 million, which was due to an increase of $10 million in the external holdings of authorised dealers, together with an increase of $2 million in the overseas assets of the BMA.