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Parties clash over recession claim

Promises of prosperity from the Government have failed to materialise as Bermuda once again finds itself in a recession, the leader of the Progressive Labour Party says.

But Bob Richards, the Deputy Premier and Minister of Finance, yesterday called suggestions that the country was experiencing an economic downturn “disappointing”.

The remarks came as David Burt was joined by Senator Kim Wilkerson to discuss Bermuda's “contracting” economy at a press conference yesterday morning. “All those worried about Bermuda's economy are justified in their concern,” Mr Burt said. Two consecutive quarters of negative economic growth is a “big deal”, he said.

“It confirms our fears that the economy in Bermuda is not working and delivering for the people it needs to deliver for.”

However, in a subsequent statement, Mr Richards said the statistics told a different story.

“For the record, there was no recession during the second half on 2016,” he said.

GDP results, he added, must be viewed contextually, not politically.

“As it relates to the fourth quarter of 2016, it was compared with the same quarter in 2015 during which the Louis Vuitton America's Cup World Series was held in Bermuda,” Mr Richards said.

“So comparing that extremely successful period in Bermuda's 2015 calendar to a similar period without those benefits, will naturally skew any results.

“You need not be an economist to understand that.”

According to figures released by the Department of Statistics last week, gross domestic product fell 2.4 per cent, after inflation, in the fourth quarter of 2016 compared with the same period in 2015. A 1.8 per cent drop was seen in the third quarter of 2016. Recession is often defined as two consecutive quarters of negative GDP growth.

Some experts, however, including Ministry of Finance forecasters and analysts from Standard and Poor's Ratings Services, have predicted economic growth for 2017 of between 1.5 per cent and 2 per cent, and 1 per cent, respectively.

Worries held by young people that they may lose jobs are “clearly reasonable”, and are backed up by information provided by the Department of Statistics, Mr Burt said.

“In the hotel industry alone, 120 jobs were lost by Bermudians, and 59 work permit-holders increased their jobs,” he added.

“Sadly, it appears that apart from photo ops, the One Bermuda Alliance does not have a plan to fix the status quo — it doesn't seem to have a plan to stem the tide of Bermudians leaving the island.”

Ms Wilkerson, Shadow Minister of Economic Development, said there had now been seven consecutive quarters of job losses for Bermudians. She described the upcoming America's Cup as “temporary stimulus”.

The senator said: “Since we have been in Opposition, we have spoken about the urgent need to diversify our economy.”

To this end, she highlighted such measures as tax reform to incentivise job creation, sustainable technology initiatives, improved public education and investment in human resources.

Mr Burt dismissed the idea of classifying the present situation as a technical recession.

“We knock on the doors and we see the people who are struggling inside of this community,” he said.

“We can understand that people may want to call it a technical recession, but the fact is we are there — our economy is contracting, it is not creating new jobs.”

To read the full statements from Bob Richards and from the PLP press conference, click on the PDF links under “Related Media”

Senator Kim Wilkerson and Opposition leader David Burt address the media at yesterday's PLP press conference (Photograph by Akil Simmons)

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Published May 10, 2017 at 12:54 pm (Updated May 11, 2017 at 8:06 am)

Parties clash over recession claim

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