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Economy grows for fifth successive quarter

Import decrease: the value of imported goods fell by $9.4 million in the fourth quarter of last year

Bermuda recorded a fifth successive quarter of economic growth in the last three months of 2015.

Quarterly gross domestic product figures released by the Department of Statistics today showed that GDP was $1.4 billion in the fourth quarter of last year, up 0.5 per cent year over year, or an increase of 0.1 per cent in real terms — after inflation is taken into account.

This marked a much slower pace than the 4.3 per cent real GDP growth seen in the third quarter.

But it meant the island’s full-year GDP totalled $5.77 billion last year, up by just over 2 per cent from the $5.65 million recorded the year before.

A report by Government statisticians said about the economy’s fourth-quarter performance: “The main drivers were a $24.3 million increase in household final consumption as well as $9.4 million less in payments for imports of goods.

“In contrast, a $17 million rise in the imports of services and an $11.8 million fall in gross capital formation (construction and machinery) contributed negatively to GDP growth.”

The report added: “After adjusting for inflation, real GDP rose by 0.1 per cent. Overall inflation for the fourth quarter, as measured by the implicit price index, increased 0.4 per cent.”

Households spent 3.1 per cent more in the fourth quarter, reflecting a bigger spend on motor vehicles, food purchased in stores and restaurant services.

After adjustment for inflation, household consumption went up by 1.7 per cent.

Government consumption fell by 1.4 per cent, attributed to a lower expenditure on wages, salaries and employee overheads, with the figure being 1.8 per cent with inflation factored in.

A 7.1 per cent fall in investment in machinery and equipment like telecommunications equipment and furniture was also recorded or 7.8 per cent in real terms.

The net surplus on trade in goods and services declined by $1.6 million in the fourth quarter of 2015, equal to 0.8 per cent and due mostly to higher payments for imported services.

The price tag for imported services went up by $17 million, attributed to higher payments for telecommunications services and advertising.

But a 4.4 per cent fall in the imports of goods and a 1 per cent rise in the exports of services contributed positively to the net surplus on trade in goods and services.

In real terms, the net surplus on trade in goods and services increased by 3.6 per cent.