Premier: Economic slowdown will continue to impact Bermuda

MONDAY, DECEMBER 12: Tourism and international business got a boost in the first nine months of this year, Premier and Finance Minister Paula Cox said today.

And the construction industry got a shot in the arm with the new general hospital – the biggest single construction project in Bermuda.

But Ms Cox predicted that the global economic slowdown would continue to impact Bermuda throughout next year, with only “modest” recovery in the Gross Domestic Product (GDP) by the end of 2012 or the start of 2013.

Ms Cox said there had been a 6.3 per cent increase in the number of visitors to the island. The increase in air visitors was the first recorded over the first three-quarters of a calendar year since 2007.

She added that tourism spending had increased as a result, up by $201.6 million (13.6 per cent) over the corresponding period of the previous year.

Ms Cox said: “This is very encouraging as Bermuda works on re-establishing the tourism sector following the global economic slowdown.”

On the business front, a total of 624 new international companies and partnerships were registered in Bermuda, a 15.3 per cent increase on the same period in 2010.

Ms Cox said: “This trend indicates that the island is still very attractive as a jurisdiction and bodes well for the future.”

She said the $500 million construction project at the hospital, which started in the first quarter of the year, would “revive the industry and sustain it until 2014, which is the estimated year of completion.”

The Premier added: “Over that time period, other private and public projects should come on line which will see increased employment in this sector.”

She continued: “Inflation remains low and stable and will likely remain so, providing that oil prices do not rise again to the levels witnessed in April this year.

“The current account surplus in the Balance of Payments illustrates that foreign exchange earnings remain strong and represents an important strength in the Bermuda economy.”

Ms Cox added: “Economic data for the first half of 2011 are consistent with the expectation that the road to full economic recovery will be long and not without continuing challenges.”

Ms Cox’s pre-Budget statement said that Bermuda’s GDP shrank by 1.9 per cent in 2010 in real terms, largely as a result of declines in construction, business activity, and the wholesale and retail sectors.

But she added: “These declines were partly offset by growth in the hotel and restaurant sector and some stabilization in the financial intermediation sector.

“It’s satisfying that accompanied by the steadying performance of the financial intermediation sector, the tourism sector exhibited growth in 2010.