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Quarterly GDP and Economic Performance
Bermuda's economy continues to trend in a positive direction. The quarter GDP estimates indicate that the economy has expanded by at least 4.2% in nominal terms over the first three quarters of 2022. In real terms, the inflation-adjusted economy is estimated to have grown by at least 1.4% over the first three quarters of 2022.
Real GDP in the first quarter of 2022 has been revised upward from a 3.9% increase to a 5.2% increase, and second-quarter GDP has been revised upward from a reported 1.7% contraction to a 3.9% increase in quarterly GDP. The changes in the first and second quarter GDP are partly because of normal revisions and partly due to computational errors with the exports of Travel Services in the Balance of Payments and International Investment Position, which impacted the Exports of Services for the Quarterly GDP.
Despite the strong positive growth in the first half of 2022, after adjusting for inflation, the GDP in constant prices decreased by 5.0 per cent in the third quarter of 2022. The level of economic contraction was a direct result of lower Government consumption, a decrease in investment, strong imports of goods and inflationary pressure. GDP in current prices declined by 0.7% during the third quarter.
Consumer spending in the third quarter increased 1.2 per cent year-over-year to $787.4 million. Consumption of services increased 2.6 per cent year-over-year, reflected in higher expenditure for accommodation services, air transport and personal care services.
Employment income in the third quarter was 4.4% above 2021 levels. Industries such as Hotels, Restaurants, International Business and Wholesale and Retail reported strong growth in employee remuneration.
Tourism arrivals and expenditures were up as Bermuda's tourism industry re-opened for leisure and business visitors. The island hosted 39,302 air visitors during the third quarter of 2022, up from 35,506 in the third quarter of 2021. Estimated expenditure by air visitors increased to $75.3 million from $61.5 million recorded in the third quarter of last year.
Consumption by the Government declined 5.7 per cent during the quarter, with lower expenditure on materials, supplies and insurance payments.
Furthermore, Gross Capital Formation declined 16.8 per cent to $197.6 million. Investment related to construction fell 8.0 per cent. While, investment in machinery and equipment decreased by 24.5 per cent due to lower imports of office furniture and equipment, industrial machine parts and motor vehicles.
Total business registration increased by 2.2 per cent year-over-year, bringing the complete business register to 16,199. There were 218 new businesses registered in Bermuda during the third quarter of 2022, a decline of 6.0 per cent from the previous year.
While the Government continues to facilitate the expansion and sustainability of Bermuda's economy, we also recognize the critical role of employers, business owners and consumers alike. High levels of inflation continue to place pressure on the economy's growth. Despite this, the Government will continue to create an environment that encourages economic growth while providing opportunities for Bermudians.
For more information, please review the Quarter 3, 2022 Quarterly GDP by Expenditure publication available at the Department of Statistics online at gov.bm.