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Economy growth inches up but lags behind pre-Covid period

Jason Hayward, the Minister for the Economy and Labour (Photograph by Blaire Simmons)

Bermuda’s economy barely grew at all in the last quarter of 2021, it has been revealed.

Jason Hayward, the Minister of Economy and Labour, denied the one per cent rise in gross domestic product after taking inflation into account amounted to a “miserable” outcome.

Asked if the growth was sluggish, the minister told a press conference: ”Certainly not.

“If we look at the performance of 2021, there was estimated to be three per cent growth in real terms.”

Mr Hayward said he had “no knowledge” as to when the St Regis casino would open - despite it being one of the four key economic boosters being pushed by the Government.

He also hit back at union criticism that the Government had “dropped the ball” over the minimum wage and living wage and had not done enough to help people with the cost of living crisis.

Mr Hayward said: “As it pertains to supporting workers, this Government has done a relatively good job.”

Referring to union leaders, the minister said: “That this Government hasn’t done enough for workers - I don’t support their positions.”

Mr Hayward said it was estimated that the economy grew by 3.8 per cent during the whole of 2021.

The minister said government expenditure had decreased. He added: “The Bermuda economy continued to trend in a positive direction in the fourth quarter of 2021, capping a year of strong economic growth.

“After adjusting for inflation, real GDP increased by one per cent during the fourth quarter of 2021, and represents the third straight quarter of growth compared to corresponding quarters of the previous year.”

While both the quarterly growth in the fourth quarter and the estimated annual increases were improvements on 2020, when the economy was ravaged by the Covid-19 pandemic, the figures remained substantially below pre-Covid-19 levels.

In 2019, when the economy had already declined marginally for two consecutive years, GDP in the fourth quarter was estimated to be $1.581 billion. In 2021, it was $1.485 billion, a 6 per cent decline.

For the year, if the 3.8 per cent increase in annual growth holds, gross domestic product would be $6.24 billion compared with $6.45 billion in 2019, a 3.3 per cent decline.

Mr Hayward said there had been a 3.8 per cent rise in consumer spending, driven by personal care and accommodation.

Business investment in capital goods increased by 5.6 per cent - mainly with investments in machinery and furniture.

https://www.youtube.com/watch?v=CP8v7uTcjVg

Trade in goods and services with non-residents resulted in a $217 million surplus for the fourth quarter of 2021, the minister said.

Foreign exchange business increased but fuel and transport costs also went up.

Mr Hayward said Bermuda’s stock of foreign assets exceeded its stock of foreign liabilities by $4.6 billion.

He said that more than 900 businesses had come to the island in 2021.

The minister stated that employee remuneration had increased, mainly in the international business sector, retail and transportation.

Mr Hayward said: “In 2021, Bermuda continued to see growth in international business,

“2021 saw a 24.4 per cent increase in new registrations, with 934 new companies coming to our shores, and a four per cent increase in jobs, or 171 positions.”

Mr Hayward said tourism arrivals were up, with a 77.8 per cent improvement in air visitor spending, after the industry was shattered by Covid-19 lockdowns and the closure of the airport in 2020.

He said hotel guest receipts were up 70.4 per cent above 2020 levels.

Mr Hayward said he had always supported May Day becoming a public holiday but discussions needed to take place whether Labour Day would be retained if that happened.

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Published May 03, 2022 at 8:04 am (Updated May 03, 2022 at 8:04 am)

Economy growth inches up but lags behind pre-Covid period

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