It was stuck in reverse, but economy’s ready to go forward *iStock photo
It was stuck in reverse, but economy’s ready to go forward *iStock photo

Bermuda’s economy has pulled out of a nosedive and started the long climb back to prosperity, Finance Minister Bob Richards said yesterday.

Mr Richards added: “The economy of Bermuda has been in decline for the last four years… if you’re in a steep dive, before you can start going up again, you have to stop going down that’s kind of where we are right now.

“We are showing very definite signs of the end of the decline... A flat economy after four years of decline is good news.”

He added: “By next year we are looking for positive growth, but I don’t want a lack of positive growth this year to seen as a negative. It’s not. If you’re driving a car backwards, you have to stop driving it backwards before you can go forwards.”

Mr Richards was speaking after Government released a report on the island’s financial health, including a mid-year economic review and performance reports for the last financial year, 2012-13, and the first quarter of this year.

The figures show few signs of economic growth – but Mr Richards insisted that the island’s long-term decline was on the turn.

Mr Richards said: “The best news is that 226 new jobs for Bermudians have been created because of the tax plan we put in place in our budget. That’s 226 jobs in the first quarter.”

The latest figures showed that Government revenues were up by $0.3 million in the quarter ending in June compared to the same period last year – a total of $208.7 million.

Employment income also went up slightly in the first quarter of the year, up 0.5 per cent to $883.3 million.

But total consumer spending in the retail sector in the first six months of the year fell slightly, down by 0.2 per cent ($1.2 million) to a total of $514 million. Of that, $487.2 million was spent at home, with nearly $27 million being spent overseas.

A total of 470 new international companies and partnerships were registered in the first six months of this year – 13.4 per cent up on the same period last year, when there were 414 new firms.

Tourism slump

But tourism figures for the first three months of the year showed a drop of 4.5 per cent in the number of visitors to the island – and a 45.4 per cent fall in cruise ship visitors, compared to the corresponding part of 2012 (see page 3).

But the report said that, although there were three cruise ship visits in each quarter, the 2012 ships were larger, carrying more tourists.

Visitor spending also took a hit – down 4.5 per cent over the first quarter of 2013 at around $34 million.

But Mr Richards remained bullish over the general economic outlook.

He said: “We are seeing evidence in real numbers and seeing a bleeding off of the declines, the shrinkages. That has to take place before we have growth.”

And he added: “This is not the news we want ultimately, but it’s an indication that things are getting better.”

Mr Richards added that the slight increase in international business showed green shoots of recovery – but injected a note of caution.

He said: “It’s good – it could be a heck of a lot better. But one cannot read too much into the number of incorporations because it’s companies that set up a physical presence that makes Bermuda go.

“We don’t have any specific data on that yet. It’s certainly not a bad number, but I’m more interested in numbers that count.”

Mr Richards added: “Less quantitatively, though, there has been a wholesale improvement in business confidence in Bermuda and a wholesale improvement in optimism.

“Everyone can see it – it doesn’t take an economist to work it out and that confidence is critical to business growth and jobs growth.”

And he said: “If you look at Government accounts for the first quarter, they are not bad and hopefully they will stay like that.

“Our plans to put people back to work are still a work in progress but it’s happening as we speak.”