Government reports dip in GDP

THURSDAY, NOV. 24: Today the Department of Statistics is pleased to release its annual publication highlighting the 2010 Estimates of Gross Domestic Product (GDP) for the Bermuda economy. This publication features the industry growth performances of the fifteen industrial sectors for which the economy is structured.

In 2010, the GDP or total value of goods and services produced locally in Bermuda totaled close to $6 billion, a fractional decline of 0.7 per cent compared to the value of production measured in 2009. After factoring out economy-wide inflation, GDP in constant dollars reached $5.4 billion year over year.

This year, in alignment with international best practices, the base year for producing GDP estimates in constant dollars was updated from 1996 to 2006.

An update of the base year ensures that the relevancy and accuracy of the GDP estimates are maintained over time. The new base year now aligns with the base period of other statistical economic indicators which includes the Consumer Price Index and the Retail Sales Index.

Other benefits derived from updating the base year are refinements in the GDP methodology and improved data sources for the calculation of GDP.

Further details for understanding the rebasing of the GDP estimates are outlined in notes attached to the annual GDP publication, 2010 Highlights. Additionally, Table 5 in the publication provides a comparison of the GDP growth rates for the 1996 and 2006 base years.

THURSDAY, NOV. 24: The Ministry of Finance today commented on the estimates of Gross Domestic Product (GDP) Report which was released today by the Department of Statistics.

The estimated GDP data confirmed that in 2010 the Bermudian economy was still struggling to overcome the adverse effects of the global recession of 2008-2009 as the majority of sectors in the economy suffered declines.

The 2010 Economic Review noted that several of the major economic indicators such as employment, air visitor arrivals, construction activity and retail sales declined in 2010; therefore the results contained in the recent release of the GDP for 2010 were not totally unanticipated.

The less than anticipated contraction in GDP of 0.7% at current market prices and 1.9% in real terms for 2010 was largely driven by declines in output in the construction, business activities and wholesale and retail sectors. These declines were partially offset by strong growth in the hotel and restaurant sector and some stabilization in the financial intermediation sector.

It is satisfying that accompanied by the steadying performance of the financial intermediation sector, the tourism sector exhibited strong growth in 2010. This bodes well for the economy as a whole because the indicators for 2011 are also solid.

 In closing the Ministry noted that notwithstanding some of the difficult economic challenges of the period, it is important that everyone in the community work together and Government stay the course with its plan to support jobs and economic growth as indicated in the recent Speech from the Throne.