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Island’s tourism receipts soar 20%

Growth spurt: the island's travel services recepits surged $29 million in the third quarter of last year, according to government statistics

A sharp increase in tourism revenues helped to support Bermuda’s current account surplus in the third quarter of last year, even as reinsurance receipts fell.

The island recorded a surplus of $208 million in the July through September period, narrowing by $10 million from the same period in 2015.

The balance of payments reflects the island’s economic transactions with the rest of the world for a given period.

The Department of Statistics stated in its commentary that the main reason for the decline in the surplus was an increase in imports.

The services account recorded an $87 million surplus in the third quarter, down $11 million from 2015. Services receipts grew by $8 million year over year to $378 million, but tourism and international business moved in opposite directions.

An increase in visitor arrivals and higher per-capita spending by visitors fuelled a $29 million increase in travel services receipts to $169 million, representing a 20.7 per cent increase from the $140 million recorded in 2015. Receipts from transportation services improved $1 million.

In contrast, receipts from business services declined $22 million, due mostly to a $16 million fall in receipts from reinsurance services. In addition, receipts from financial services and information communication technology services declined by $3 million each.

Island residents also spent $16 million more on business services, such as management and consultancy than they did a year before.

The deficit on the goods account widened by $12 million to $237 million as the value of imported goods rose by 5.2 per cent, driven by a $9 million rise in the value of finished equipment and machinery brought in.

Imports of food, beverages and tobacco also rose by $3 million, while fuel imports fell $1 million.

There were changes in the geographical mix of import sources as well, as the island spent $25 million more on imports from the US, $7 million less on those from the Caribbean region and $4 million less on Canadian imports.

The primary income account, which reflects balances on compensation earned/paid to non-residents, and income from investments and payroll tax paid by non-resident companies to the government, recorded a surplus of $389 million, up from $376 million in 2015.

Transactions related to investment income resulted in a surplus balance of $31 million compared to a deficit balance of $3 million in 2015. The surplus balance on employee compensation fell $21 million.

The island’s international investment position — reflecting the overseas assets of Bermuda residents and companies minus their overseas liabilities — increased by $4 million to $4.382 billion.