GDP bounces back after recession

  • Economic reports: Walton Brown, Minister of the Cabinet Office, said economic data released today shows some positive signs for the island’s economy (File photograph)

An economic indicator that strongly improved during the period when the island hosted the 2017 America’s Cup, has edged higher again.

Bermuda’s gross domestic product for the second quarter of 2018, when adjusted for inflation, rose by 0.8 per cent year-on-year.

When expressed in current prices GDP, which measures the value of goods and services produced by Bermuda, was $1.55 billion for the second quarter, an improvement of 2.1 per cent on the previous year.

However, the report also included downward revisions for the two previous quarters, which showed that Bermuda dipped into recession, according to the widely used definition of two consecutive quarters of negative growth.

The fourth quarter of 2017 was revised from 0.5 per cent real GDP growth to 0.1 per cent contraction. The first quarter of 2018 was revised downwards by 1.2 percentage points to negative 1.6 per cent real GDP growth.

Walton Brown, Minister of the Cabinet Office, said: “The real GDP for the second quarter increased 0.8 per cent, which shows some strengthening in the economy, especially when this is being compared with the second quarter of 2017 when Bermuda hosted the America’s Cup. This is encouraging to see.”

The GDP figure was included in four economic data reports released by the Bermuda Government Department of Statistics yesterday.

The island’s inflation rate was 1.1 per cent in September and October, and was included in the consumer price index reports for the two months.

Mr Brown said the low level of inflation was beneficial to the economy “since it helps to keep check on the price of goods and services, and also encourages people to spend and businesses to invest”.

The fourth economic data bulletin released today showed Bermuda’s balance of payments was $149 million in the second quarter, which was $6 million down on the corresponding period in 2017. It was the lowest quarterly surplus in the period January 2017 to the end of June 2018.

Mr Brown said the balance of payments are an important strength in the economy and had “recorded a very respectable current account surplus of $149 million”.

The minister also said: “The economic data released exhibits some positive signs in our economy, which is still recovering after several years of economic contraction.”

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