Bermuda’s economic recovery plan 'ambitious but achievable'
Bermuda’s Economic Recovery Plan is “ambitious but achievable”, the Minister of Finance told an international forum yesterday.
Curtis Dickinson was speaking on the panel, “Economy and Sustainability for Global Islands” at the Island Finance Forum 2021, a virtual conference.
Mr Dickinson said the island has developed an ERP with 31 priority initiatives to accelerate medium-term economic growth.
He said the plan combines fiscal responsibility with a clear path to growth, employment, and greater economic equity.
Policy measures include support for specific sectors and economic diversification measures, labour market interventions, and efforts to accelerate digital transformation.
He said the ERP sets out a desire to go further in areas such as environmental sustainability, and economic equality and empowerment, as well as catalysing and mobilising external investment to accelerate growth in key sectors. Key healthcare issues are also addressed in the ERP, the minister said.
In parallel, Mr Dickinson said other substantive initiatives were also under way, including education reform, tax reform, and pension reform as well as policies to support Bermuda’s international business sector, including “the highly competitive search for climate-related financial opportunities”.
Mr Dickinson said international benchmarks suggest that with the successful implementation of the 31 priority initiatives Bermuda should expect an increase in GDP of 1.3 to 1.5 per cent per year above baseline economic growth from 2023.
He said the ERP had six key principles – combating the health and economic impacts of Covid-19 as a priority, reducing the cost of living, achieving fairness and equity, financial viability, fiscal prudence, and timely, decisive action.
Mr Dickinson said: “While the future remains deeply uncertain, and economic risks are mostly on the downside, it is our view that Bermuda’s ERP provides a blueprint for a successful recovery.
“However, effective implementation is now critical for us to ensure that Bermuda maintains fiscal prudence and forges a new path to growth, employment and greater equity.”
Earlier, Mr Dickinson reviewed for a global audience the steps that government took to address the health, fiscal and economic challenges resulting from the pandemic, and to ensure future economic sustainability and stability.
He said they included emergency funding for healthcare, introduction of an unemployment benefit scheme that at its peak assisted approximately one-third of the island’s workforce, financial support for small and medium-sized businesses, granting extensions for the filing of taxes, the deferral and waiving of some fees, taxes and penalties, and legislation to permit pension withdrawals.
Mr Dickinson said government’s initial emergency economic support for the fiscal year 2020-21 was $127.2 million.
He told the audience that Bermuda’s GDP is expected to contract by 9 per cent in 2020, and that a budget deficit originally forecast to be $19.8 million for the fiscal year 2020-21 had ballooned to $245.5 million.
Mr Dickinson said government had taken “decisive action to reduce spending”, and said it had accessed the international capital markets to fund expected current and future deficits, and to control interest costs.
The forum concludes today.