Imports slumped as pandemic restrictions kicked in
Imports slumped by more than $150 million in the second quarter of last year as the pandemic sparked economic turmoil, figures released today by the Bermuda Government show.
The island’s balance of payments surplus – summarising its transactions with the resident of the world – rose by $94 million to $250 million in the April-through-June period.
A fall in the value of imported goods was a major driver of the increase in the surplus, a report from the Department of Statistics showed.
During the second quarter, the goods account deficit narrowed by $180 million to $178 million as imports dropped off sharply, as Covid-19 restrictions including April’s lockdown, took effect.
The report states: “The value of imported goods decreased for all broad commodity groupings. Imports of machinery, finished equipment, fuels and transport equipment recorded the largest decreases. These commodity groups combined for a $155 million decrease in imports.”
Revenue earned from exported goods fell to $2 million, a decrease of $3 million from the second quarter of 2019.
Restrictions on travel during the period also had a dramatic impact. The service account surplus decreased by $122 million, largely due to a $179 million drop in net receipts for travel services.
The primary income account surplus increased by $18 million year-over-year to $407 million. The primary income account reflects balances on compensation paid to non-residents, and income from investments and payroll tax paid by non-resident companies to the government.
The increase reflected primarily a $31 million rise in the balance on investment income as fewer dividends were paid.
The surplus on employee compensation and other income transactions decreased by $11 million and $1 million respectively.
Bermuda’s net international investment position increased to $3.88 billion, reflecting the amount that the stock of foreign assets held by Bermuda residents registered above its stock of foreign liabilities. The net IIP increased by $612 million over the first quarter of 2020.
Foreign assets decreased to $14.93 billion. Between the first and second quarters of 2020, Bermuda residents’ net acquisition position of financial assets fell $408 million due mostly to decreased holdings of currency and deposits with non-resident banks.
Foreign liabilities decreased to $11.05 billion. Bermuda residents’ stock of foreign liabilities decreased by $1.02 billion from the first quarter of 2020. The decrease in the liability position reflected mostly a drop in currency and deposits of non-residents.