Economic growth limited due to pandemic restrictions ~
Today, the Minister for the Cabinet Office, the Hon. Wayne Furbert, JP, MP, released the Quarter 4, 2020 Quarterly Gross Domestic Product (GDP) by Expenditure publication from the Department of Statistics.
The Minister noted that due to restricted economic activity caused by mitigation efforts to contain the spread of COVID-19, there was a decrease in the fourth quarter GDP.
Minister Furbert explained, “As the public will appreciate, last year our economy was significantly challenged due to the Covid-19 pandemic. Like other jurisdictions around the world, Bermuda was not alone in seeing a decline in its final quarter GDP.
"After adjusting for inflation, the GDP in constant prices for the fourth quarter decreased by 4.0 per cent to $1,517.20 million. The decline in growth was influenced primarily by lower Household Final Consumption on services related to transport, recreation, restaurants and accommodation, all of which were affected by restrictions on economic activity for businesses in these industries.”
In analyzing the components, the Minister continued, “Final consumption expenditure fell by 3.6 per cent led by the decline in Household Final Consumption, which offset growth in Government Final Consumption.”
Household Final Consumption decreased 5.8 per cent year-over-year to $759.8 million. Higher expenditure on non-durable goods was offset by lower expenditure on services and durable goods.
"Consumption of services fell by 6.3 per cent mostly due to lower expenditure for recreation services, restaurants and accommodation services. For durable goods, spending decreased 4.6 per cent with fewer purchases of motorcycles and computers. In contrast, consumption of non-durable goods grew by 12.7 per cent due largely to increased expenditure on food (+12.4 per cent) and alcoholic beverages (+5.3 per cent).”
"For Government Final Consumption, a 4.8 per cent growth during the quarter was due to higher spending on employee overheads, other personnel costs as well as spending on goods and services.”
The Minister added, “Gross Capital Formation (i.e. investment in fixed assets) fell 4.8 per cent to $214.6 million. Gross Capital Formation related to Construction registered a 7.7 per cent decrease. Investment in Machinery and Equipment fell 0.4 per cent due mostly to lower spending on agricultural machinery and office equipment.”
“The net surplus on trade in goods and services decreased 4.7 per cent to $332.0 million. This decline reflected mostly lower receipts for the Exports of Goods and Services. Exports of Goods and Services fell 7.8 per cent due mostly to travel restrictions which negatively affected visitor expenditure as well as revenue earned from selling fuel to visiting airlines. Imports of Goods and Services decreased 10.4 per cent as payments fell for passenger and freight transport, travel services, construction services, imported fuel, finished equipment and transport equipment.”
The Quarter 4, 2020 Quarterly GDP by Expenditure publication is available online at https://www.gov.bm/quarterly-gross-domestic-product. The public is advised to read the concepts and definitions on the last page of the publication prior to reviewing the data.