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GDP grows for fourth consecutive quarter

Jason Hayward, Minister of Labour and Economy (File Photograph)

Rebounding tourism and strong consumer spending is keeping Bermuda's economy moving in the right direction, according to newly released first-quarter figures.

But there were some negatives in the financial picture.

According to Jason Hayward, the economy minister, total business registration slipped by 0.8 per cent with 266 new businesses registered, a decline of 17.1 per cent from the previous year.​

“The current economic trends show promise for an environment that encourages economic growth while providing opportunities for Bermudians,” he said.

The report shows that after adjusting for inflation, real gross domestic product increased by 3.9 per cent, representing the fourth consecutive quarter of year-over-year economic growth.

Contributing to the trend was a 2.7 per cent rise in consumer spending in the first quarter compared with the previous year.

Employment income for the first quarter was 6.2 per cent above the 2021 level. Industries such as hotels and restaurants, transport, communications and international business reported strong growth in employee remuneration.

Tourism arrivals and expenditure were up as Bermuda reopened for leisure and business visitors.

The island hosted 12,280 air visitors during this period, up from 3,423 in the first quarter of 2021. This sector saw a $17 million (306.4 per cent) improvement in air visitor spending over last year. In addition, hotel gross receipts for the first quarter were $39 million (198.1 per cent) above 2021 levels.

Mr Hayward said consumption by the Government increased 2.3 per cent, with higher expenditure on materials, supplies and insurance payments.

Despite the general upward growth, business investment in capital goods contracted by 2.4 per cent due primarily to a reduction in the importation of machinery and equipment such as furniture and motor vehicles and the decline in the value of construction year over year.

Bermuda’s trade in goods and services with non-residents resulted in a $334 million surplus for the first quarter of 2022, increasing $34 million from a year ago.

Bermuda increased its foreign exchange earnings from the exports of services related primarily to transactions in business, accounting and insurance services.

Some of this growth was tempered by imports, such as fuel, and increased payments for services, such as air passenger transport and freight transport services.

At the end of the first quarter, the value of Bermuda residents' stock of foreign assets registered above its stock of foreign liabilities. Bermuda's stock of foreign assets exceeded its stock of foreign liabilities by $6.1 billion, the net international investment position increased by $1.4 billion over the fourth quarter of 2021.

Mr Hayward said that while the general economic performance is good news, Bermuda must continue working together to sustain economic growth and increase the number of available jobs.

“To that end, I am also pleased to advise that further progress has been made on the Economic Recovery Plan,” he said. “As many will know, Bermuda's ERP aims to produce jobs, increase GDP and, combined with other measures, lead us to a sustainable future.

“The 31 policy initiatives under the ERP are prioritised to focus on areas with the highest impact on Bermuda's medium-term economic growth and employment.”

The four lead initiatives under the ERP include the rehabilitation of the Tyne's Bay infrastructure, development of uptown Northeast Hamilton; development of a casino industry; and development of vertical farming.

Mr Hayward said detailed action plans for each of the four priority initiatives were completed in April, and stakeholders have continued the work required to move these initiatives forward.

To implement the 31 initiatives under the ERP umbrella, the Government kicked off a dedicated project management office on June 1. The PMO’s responsibilities include monitoring, tracking and lending assistance where required while emphasising on the four lead policy initiatives.

“While this is welcome news, I must point out that the Government is not only working towards implementing the ERP,” Mr Hayward said. “In support of the Government's economic development strategy, other entities are responsible for the execution of critical components.”

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Published August 05, 2022 at 7:57 am (Updated August 05, 2022 at 7:58 am)

GDP grows for fourth consecutive quarter

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