The contraction of the economy in the latest statistics shows that the Government’s Economic Development Strategy is not working, according to shadow finance minister Douglas De Couto.

The One Bermuda Alliance MP said the 1.2 per cent decline in gross domestic product in the second quarter of 2025 showed that “there was very little improvement in our local economy”.

Jason Hayward, the Minister of Economy and Labour, said on Wednesday that economic growth slumped during the second quarter of last year, held back by a reduced trade balance owing to an increase in imports.

He said consumer spending was recorded at $841 million while household consumption increased 1 per cent over the previous year.

Household consumption of services crept up by 0.1 per cent through higher expenditure on personal care and air transport services.

Bermuda hosted 67,687 air visitors during the second quarter of last year, up from 67,121 recorded the previous year.

Mr Hayward highlighted that the island’s economic trade balance declined by 7.1 per cent to $417.9 million during the reporting period, as growth in payments from imports of goods and services “outpaced” the growth of receipts for exports.

He said the Government will continue to execute its Economic Development Strategy to deliver sustainable growth and development.

Dr De Couto said of the report: “There was less than 1 per cent growth in air visitors, household consumption of services was basically flat, and household final consumption and services consumption were the lowest by far in four years.

“Growth in household consumption has reduced successively over each of these years and has come to a virtual standstill, while overall GDP has shrunk year-on-year.”

He said while Mr Hayward highlighted wage increases in multiple industries, “these are driven by the 20 per cent government pay rise funded by taxpayers and the 8.2 per cent in IB”.

Dr De Couto said the employment income increases for local business services “see only 2.4 per cent while hotels restaurants see 4.8 per cent, which is eaten away by 1.9 per cent inflation — almost no pay increase at all for those in local business services”.

He added: “It’s clear that the Government’s Economic Development Strategy is not doing what they claim.”

Dr De Couto said to right the economy, the One Bermuda Alliance would bring new investors into Bermuda, including opening up previously defunct hotel sites.

“We’d cut red tape for local and international business alike and get out of the way of our hard-working local entrepreneurs and businesspeople,” he added.

He said the Opposition would also cut the sugar tax to reduce grocery bills, and look at moving customs duty to point of sale to assist local businesses.

He added: “And we would stop undercutting local business by running the taxpayer-subsidised MyBermudaPost, which competes with local retailers, or paying high-priced consultants on vertical farming.”

Dr De Couto said: “Our concern is, has been and will be for Bermudians who make a living in the local economy, who have seen their pay packets shrink compared to their expenses; and they are ignored in the Government’s pronouncements of economic success.

“Our focus is on how to get the local economy going again, and working for Bermudians.”