A substantial increase in money from investments and international business led to the balance of payments surplus rising by 77 percent during the third quarter of 2003 compared to the previous quarter.

This rise in one of the Island's most important economic indicators comes despite a large drop in tourist spending, recorded as travel receipts, which fell 22.7 percent from $141 million to $109 million for the third quarter of 2003.

Figures released by the Bermuda Monetary Authority yesterday, which are now eight months out of date, showed that the balance of payments stood at $62 million at the end of September 2003.

A quarter earlier the balance of payments, which measures how much money a country takes in in receipts for trade, exports, travel and investment income against how much it spends buying the same products overseas, stood at $35 million, and the same quarter during 2002 it the surplus stood at $37 million.

At the end of 2003, former Finance Minister, the late Eugene Cox, said that Bermuda's balance of payments were expected to come under pressure in the third and fourth quarters as a result of the Hurricane Fabian.

He predicted a higher than expected imports of building materials and supplies, higher than usual imports of furniture and equipment and fewer visitors and therefore lower visitor expenditure.

Visitor spending was down, but the amount of imports was also down during the third quarter of the year, the BMA figures show.

During 2002, the current account surplus for the year was cut in half from a year earlier from $145 million to $67 million for the year which led to market watchers worrying that the economy could be in slow-down.

But the continued boom in international business has kept the economy's head above water. Listed as receipts of the professional, managerial and technical services, it has risen to $312 million for the third quarter in 2003, up 14 percent from $273 million in the second quarter of the year and up ten percent from $284 million in the same quarter in 2002.

Investment income also made a huge gain with markets around the world in recovery, coming in at $83 million for the third quarter of 2003, more than three times what it was in the third quarter of 2002, when it stood at $25 million and up 38 percent on the second quarter of 2003.

A total of $493 million worth of current account payments were recorded in the third quarter of 2003, while $555 million worth of receipts were recorded, leaving a surplus of $62 million.

The amount of merchandise imported was recorded at $202 million for the third quarter 2003, down from the previous quarter by 24 percent to $235 million and up ten percent from the third quarter 2002 when it was $183 million.

Exports of merchandise on the other hand, fell from $16 million in the second quarter of 2003, to $6 million in the third quarter of last year, also down from the third quarter of 2002 when exports of merchandise stood at $13 million.

The balance between exports and imports left an overall deficit of $196 million for the third quarter of 2003.

There was also a deficit of $26 million in shipping and other transportation, after payments were made of $30 million and receipts were logged at $4 million.

Investment income payments, which measures how much Bermudians are saving abroad, fell to $16 million from $19 million a quarter earlier and the same as the same quarter in 2002.

The year to date figure for balance of payments for the first three quarters of 2003 was $78 million, already up on the $67 million recorded in 2002 but no where near the amount for 2000 and 2001, when it stood at $196 million and $145 million respectively.

At a glance:

Annual Balance of Payments surplus from 1998 to 2002

1998: $223 million

1999: $254 million

2000: $196 million

2001: $145 million

2002: $67 million

First three quarters of 2003: $78 million