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Balance of payments surplus declines $41m

Bermuda’s balance of payments current account surplus fell $41 million to $201 million in the third quarter compared to the same period in 2019.

This is a measure of Bermuda’s trade with the rest of the world.

The decrease in the surplus was due mainly to a deficit balance of $22 million on the travel account compared to a surplus balance a year ago.

Also for the quarter, the goods account deficit decreased by $39 million to $224 million. The decrease in the value of imported goods was reflected primarily in the imports of fuels which fell by $22 million.

Imports of finished equipment dropped $10 million while food, beverages and tobacco fell by $9 million.

In contrast, imports of transport equipment increased by $6 million.

Payments for imported goods from the United States, Bermuda’s largest trading partner, fell by $39 million.

Imported goods from the Caribbean and Canada declined by $7 million and $5 million, respectively, while imports from the United Kingdom rose by less than $1 million.

Revenue earned from the exports of goods decreased from $5 million in 2019 to $2 million in 2020 as less fuel was re-exported to foreign airlines visiting Bermuda.

The island’s surplus balance on the services account fell $102 million year-on-year during the third quarter to $51 million.

This narrowing in the surplus balance reflected mostly a $163 million fall in net receipts from travel services due to decreased expenditure in Bermuda by fewer visitors.

The deficit balance on information communications and technology services widened by $7 million during the quarter, mostly due to lower receipts from computer services.

In contrast, other business services recorded a larger surplus balance of $72 million compared to $21 million the previous year. This improvement was due to lower payments for engineering/construction services related to the airport construction.

The balance on financial services rose by $3 million year-over-year.

The surplus on Bermuda’s primary income account increased by $42 million year-over-year to $447 million in the third quarter of 2020.

Bermuda increased its net incurrence of financial liabilities by $387 million in the quarter compared to a decrease of $135 million in 2019.

The island’s trade in financial assets and liabilities with the rest of the world resulted in a net international investment position of $2,833 million at the end of the third quarter 2020, falling $258 million over the second quarter of 2020.

The IIP is a record of Bermuda residents’ investments abroad and non-residents’ investment in Bermuda.

Two of the four institutional sectors recorded positive balances on their net international investment positions at the end of the third quarter.

Financial corporations recorded a balance of $5,796 million and non-profit institutions recorded a net asset position of $32 million.

Non-financial corporations held a net liability position of $2,326 million with the rest of the world at the end of the third quarter 2020.

The general government sector’s external liabilities exceeded its external assets by $670 million due mostly to a rise in long term debt security liabilities.

The balance of payments figures were compiled by the Department of Statistics, and released by the Minister for the Cabinet Office, Wayne Furbert.

The 2020 Q3 Balance of Payments & International Investment Position publication is available online at https://www.gov.bm/balance-payments

Balance of payments: Bermuda’s current account surplus was $201 million in the third quarter of 2020 (File photograph by Blaire Simmons)

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Published March 23, 2021 at 4:45 pm (Updated March 23, 2021 at 6:11 pm)

Balance of payments surplus declines $41m

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