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Bermuda’s real GDP rises 1.5%

Bermuda's gross domestic product, adjusted for inflation, rose 1.5 per cent during the fourth quarter of last year, compared to the same period in 2017.

When expressed in current prices, the GDP, which measures the value of goods and services produced by Bermuda, was $1.55 billion, an improvement of 3 per cent year-on-year.

The new airport terminal and St Regis hotel being built at St George's were reflected in the $95.7 million spend, adjusted for inflation, associated with construction, which was up 7 per cent for the last three months of 2018 compared to the same three months in 2017.

According to a report by the Department of Statistics, households spent less on clothing, furniture, “information-processing equipment”, and accommodation services between the start of October and the end of December.

Household final consumption, again adjusted for inflation, was down 2.6 per cent year-on-year at $638.4 million. Government's consumption rose 0.4 per cent to $181 million due to higher wages and salaries, offset by a reduction in spending on goods and services.

The net surplus on trade in goods and services increased $30.4 million, or 24.8 per cent, mostly due to a 14.2 per cent increase in the export of services. This reflected increased earnings travel services and financial services.

There was a 16.9 per cent increase in imported goods, mostly due to imports of fuel, machinery and finished equipment.

Quarterly GDP figures are a lagging economic indicator, and are not set in stone. They can fluctuate over time as a result of revisions when new economic data comes to light.

This happened in February, when the revised figures for the fourth quarter of 2017 changed from marginally negative to positive growth. This meant that a technical recession of two back-to-back negative quarters, as indicated by earlier figures for that quarter and first quarter of 2018, was not a recession after all.

Separately, the Consumer Price Index for February shows inflation at 1.1 per cent, down 0.2 percentage points from January.

The all-items index remained at 105.2, meaning a basket of goods and services that cost $100 in April 2015, the baseline month, cost $105.20 in February.

Prices on the food sector dipped 0.2 per cent, while the transport and foreign travel sector was down by 0.9 per cent.

There was a 0.5 per cent increase in the rent sector, a 0.2 per cent rise in the tobacco and liquor sector, and a 0.1 per cent increase in household goods, services and supplies. All other sectors were unchanged.

For comparison, the inflation rate in both the US and Canada was 1.5 per cent in February, while it was 2.5 per cent in the UK.

Click on Related Media for GDP and Consumer Price Index bulletins

Peaks and troughs: the ups and downs of Bermuda's real GDP growth-rate since 2014. The fourth-quarter figures for 2018 show a 1.5 per cent improvement compared to the same period in 2017 (Graph by Scott Neil)

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Published May 09, 2019 at 8:02 pm (Updated May 10, 2019 at 12:55 am)

Bermuda’s real GDP rises 1.5%

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