The economy suffers the deepest contraction in living memory – The Royal Gazette
Updated: November 26, 2021 at 7:32 PM
Hammered Tourism: Horseshoe Bay Beach (Photograph by Akil Simmons)
The economy suffered the biggest contraction in living memory last year, according to the latest statistics revealed tonight.
Bermuda’s Gross Domestic Product Report 2020 said the economy had contracted 6.9% in real terms as the Covid-19 pandemic and lockdown resulted in declines in 13 of 19 industries analyzes.
The Statistics Department’s document included most of the tourism-related businesses.
The most affected sector was accommodation and food services, which fell 68.2%.
A separate measure – gross output – which largely measures revenue, saw the same industry fall by $ 430 million or 60.3%.
The arts, entertainment and recreation sector took a hit.
It declined by 26.9% and its production was reduced by 33% or $ 20 million.
Construction was also hit – the sector fell 24.4 percent with production down $ 87 million or 17.4 percent.
The 6.9% contraction was worse than the post-financial crisis recession of 2009 which saw the economy shrink 5.6%.
The gloomy numbers marked the seventh time in ten years that the economy has shrunk.
Bermuda has only experienced annual economic growth of more than one percent in one year since 2007-2017, when the America’s Cup boosted the economy by 3.3 percent.
Wayne Furbert, Minister of the Cabinet Office, said: “As the public will understand, last year our economy was severely affected by the pandemic.
“Like other countries around the world, Bermuda was not alone in experiencing a decline in its annual GDP.
“However, it should be noted that in response to the pandemic and to help individuals and businesses in immediate need of financial assistance, the government instituted several emergency measures last year.”
Mr Furbert highlighted the unemployment benefit program, which provided temporary help to eligible workers who lost their jobs as a result of public health measures imposed to curb Covid-19.
He added: “Steps taken to help businesses have included extending tax filing deadlines and deferring and waiving fees, taxes and penalties.
“In addition, reductions in social charges have been granted to the restaurant and bar, taxi and hotel sectors, all of which have been seriously affected by the stay-at-home measures that have been put in place.
“And to effectively meet our economic challenges in the long term, the government presented its economic recovery plan, which is well underway. “
Mr Furbert said the electricity, water supply and waste management sector were among the areas that saw growth.
The sector grew by 17.8% with cost savings on power generation.
Mr Furbert said the increase was due to production linked to falling electricity generation costs, largely due to the drop in the price of oil during the pandemic, which has fallen to its most severe low level in 22 years.
However, it has since returned to 2018 levels.
Mr Furbert added: “International business activity grew 1% while wholesale and retail activity increased 0.7% mainly due to retail sales of food and alcohol, which offset lower sales of clothing, fuel, electronics and building materials. “
He confirmed that tourism dependent industries such as the accommodation and food service industry suffered losses, while tourism support industries such as the transportation and warehousing industry suffered the losses. ripple effects of low visitor spending.
GDP per capita at current prices fell 7.3% to $ 107,435 at the end of 2020.
Mr Furbert said: “Construction and quarrying activity also saw a decline in the second quarter of 2020 due to public health restrictions in place.”
He stressed that despite the problems, the government is committed to economic recovery.
Mr Furbert said: “In March 2021, Finance Minister Curtis Dickinson presented a comprehensive economic recovery plan for Bermuda.
“The preparatory work for phase 1 consisted of identifying objectives, guiding principles and a preliminary list of initiatives. This work was undertaken from July to September 2020. “
Mr. Furbert added: “We are pleased to see that nine of the 31 projects have been completed. The work continues on the others.
“These projects are considered to be the best programs aimed at creating economic growth in the short to medium term, while meeting the goal of increasing jobs, diversifying our economy and improving Bermuda’s infrastructure for the future. ‘to come up.
“These initiatives will ensure Bermuda opens a new path to growth, jobs and greater equity.”
For more information on the Stimulus Package, visit https://www.gov.bm/economicrecovery-updates.
The 2020 annual GDP can be viewed at https://www.gov.bm/annual-gross-domestic-product.