GDP Figures ‘Not Unanticipated’
Despite sharp contractions in some areas of the economy, Bermuda’s gross domestic product [GDP] only shrank marginally between 2009 and 2010 new figures released today [Nov. 24] by the Department of Statistics reveal.
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.
The figures feature the industry growth performances of the 15 industrial sectors for which the Bermuda economy is structured.
A Bermuda Finance Ministry said the new statistics demonstrate that in 2010 the island’s 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,” said the spokesman.
“The less than anticipated contraction in GDP of 0.7 percent at current market prices and 1.9 percent 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 stabilisation in the financial intermediation sector.”
The Finance Ministry said it was 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,” said the spokesman.
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.
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,” said the Director of Statistics. “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.”
The full 13-page report is below, click ‘Fullscreen’ for greater clarity:
That’s not the worse news. Surprised myself, hopefully 2011 will end up being a year of growth.
2011 will be much worse than 2010. And 2012 will be worse than 2011.
This is whay your crystal ball says?
2011 stands absolutely no chance of being a year of growth.
Come on..These books are cooked- economy wide inflation for all goods and services- the deflator is at 1.1%,, Is rent an even bigger percentage than the 32.50% in the CPI. Well at least we know you can’t take the deflator any lower than zero
The irony is that we have private debt/gdp close to 100% and most of the rent is to IB et al. So if rents drop and there is not an equal drop in our adjustable rates then it is actually inflationary to the landlord. So if for this implicit economy wide deflator we have rent at 50% or so with food and energy stripped out, then we could get delation numbers that add back to GDP even though the real impacts are higher interest service expense. Rates will eventually have to go down if the economy slip further.