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Bermuda’s second-quarter trade surplus was $313m

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Balance of payments figures released by the Government show a current account surplus of $313 million in the second quarter of 2021 — a $37 million increase year over year.

The growth in the surplus reflected an increase in the inflow of currency to the island — receipts from non-residents which were larger than the rise in payments, said the Minister for the Cabinet Office, Wayne Furbert.

The minister released the 2021 Q2 Balance of Payments and International Investment Position publication from the Department of Statistics.

Transactions on Bermuda’s assets accounts resulted in a net lending position of $351 million.

Factors influencing this year-over-year performance include the fact that Bermuda’s net acquisition of financial assets resulted in an increase of $1 billion compared with a decrease of $130 million last year.

The island increased its net incurrence of financial liabilities by $838 million this quarter compared with a decrease of $289 million in 2020.

With the exception of the goods account, all key sub-accounts recorded improvements in their net balance led by an $80-million increase in the surplus on the primary-income account.

The primary-income account reflects balances on compensation earned/paid to non-residents, and income from investments and payroll tax paid by non-resident companies to the Government.

Year over year, the surplus on the primary-income account increased by $80 million during the second quarter this year.

This rise reflected primarily an increase in net employee compensation by $60 million. Net investment income grew by $14 million while the net surplus balance on other income increased by $6 million.

Year over year, the deficit on the goods account widened by $58 million to $237 million. Most of the $58 million was reflected in a $42 million rise in imported goods from the United States.

Among the commodity groups, growth was reflected primarily in the imports of finished equipment (+$17 million), chemicals (+$11 million) and machinery (+$10 million). Imports across all other commodity groups also increased.

Services transactions realised a surplus of $72 million, up $19 million year over year during the second quarter this year. The higher surplus balance reflected mostly improvements in travel services and business services.

The deficit on travel services narrowed by $19 million because of increased expenditure in Bermuda by visitors.

The surplus on business services increased by $16 million driven by transactions in accounting services, legal services and premiums collected for direct insurance services.

The surplus on Bermuda’s primary income account increased by $80 million to $511 million in the second quarter of 2021.

Bermuda’s net international investment position increased to $4.9 billion.

At the end of the second quarter, the stock of foreign assets held by Bermuda residents registered above the stock of foreign liabilities by an estimated $4.9 billion.

The net international investment position increased by $877 million over the first quarter of the year.

Foreign assets rose to $18.3 billion.

Between the first and second quarters of 2021, Bermuda residents’ stock of foreign financial assets grew by $1.7 billion owing mostly to increased holdings of loans and debt securities.

Bermuda’s liability position increased to $13.4 billion, as Bermuda residents’ stock of foreign liabilities increased by $847 million from the first quarter of 2021.

The increase in the liability position reflected mostly a rise in currency and deposit liabilities along with equity and investment funds held by resident institutions and owed to non-residents.

The international investment position by resident institutional sectors show that non-financial corporations held a net liability position of $2.2 billion with the rest of the world at the end of the second quarter.

The general government sector’s external liabilities exceeded its external assets by $78 million, representing a smaller negative net investment position because of a rise in portfolio investment assets.

Financial corporations held a net asset position of $7.1 billion owing mostly to holdings of portfolio investments in the form of debt securities and other investments in the form of currency and deposits.

Non-profit institutions serving households also recorded a net asset position of $44 million at the end of the second quarter.

The Bermuda current account recorded a surplus of $313 million in the second quarter of 2021 (Graph: Department of Statistics)
2021 Current account Receipts (Graph: Department of Statistics)

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Published November 10, 2021 at 7:45 am (Updated November 10, 2021 at 11:33 am)

Bermuda’s second-quarter trade surplus was $313m

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