Minister: “There Was No Recession In 2016″

May 10, 2017 | 38 Comments

[Updated] “For the record, there was no recession during the second half of 2016,” Deputy Premier and Minister of Finance Bob Richards said today, adding that “it is disappointing, but perhaps not unexpected given where we are in the electoral cycle, that critics fall over themselves to find fault.”

The Minister’s comments follow after the PLP’s press conference earlier today in which Shadow Finance Minister and Opposition Leader David Burt said that “Bermuda is once again in recession” and “two consecutive quarters of negative economic growth is a big deal and confirms our fears that the economy in Bermuda is not working and delivering for the people it needs to deliver for.”

Minister Richards said, “It is disappointing, but perhaps not unexpected given where we are in the electoral cycle, that critics fall over themselves to find fault, when a mere look around Bermuda would provide indisputable, visible evidence that Bermuda has actually made substantial economic progress since 2012.

“For the record, there was no recession during the second half of 2016. Equally, GDP results for Bermuda from quarter to quarter, provided in the Quarterly Bulletin of Statistics, must be observed within the context of visible facts, instead of through a political prism.

“That context is revealed through a full review of the events that shaped the comparative periods.

“As it relates to the 4th quarter 2016, it was compared to the same quarter in 2015 during which the Louis Vuitton America’s Cup World Series was held in Bermuda from the 16th – 18th of October, 2015.

“That event caused GDP results to be very strong for that quarter, so it would have been very difficult for Q4 2016 to have been better than that.

“It should be noted that the spike in the economy during the World Series in October 2015:

  • “Brought 10,000 people to the Event Village on Front Street.
  • “Injected $8.6M into our economy – 70% of which came from overseas, including visitor spending.
  • “Benefitted Bermudians widely, through increased income to restaurants, retailers, hotels, taxi drivers, security firms, boat charterers, hospitality workers, and many small business owners and entrepreneurs.
  • “Generated international media coverage delivered to over 8 million people globally.
  • “Provided more than $14-million worth of advertising value around the world.

“So comparing that extremely successful period in Bermuda’s 2015 calendar to a similar period without those benefits, will naturally skew any results. You need not be an economist to understand that.

“This simple comparison is the chief reason GDP figures showed a year over year decline for the fourth quarter of 2016.

“So, to reiterate, there was no recession in 2016.

“Also a surge of imports, which required a large outflow of cash, during Q1/2017, in preparation for the AC35 will have resulted in a dampening effect on that quarter’s results.

“But, of course, there will be a corresponding spike in GDP results for Q2/2017 attributable to AC35, the likes of which Bermuda will have never seen before. However, this in turn will likely produce a poor year over year comparison for Q2/2018.”

Update 5.20pm: A PLP spokesperson said, “It seems as if Bob Richards and the minority OBA Government are both ignoring the facts and economic pain felt by many Bermudians.

“Bob Richards is entitled to his own opinions, but not his own facts. The fact is that in the third and fourth quarter of 2016, GDP fell by 1.8% and 2.4% respectively.

“A recession is defined by two consecutive quarters of negative GDP growth. Bermuda’s economy has re-entered a recession and Bob Richards cannot redefine the laws of economics.

“Bermuda can do better than it’s doing under the OBA.

“Under the OBA, the divide between the two Bermudas is increasing. The Minister’s disconnect from the economic reality that most Bermudians are feeling could be that in the OBA’s Bermuda, things are going well and the haves are getting ahead.

“But, in the rest of Bermuda, Bermudians are struggling to find work as Bermudian jobs disappear, falling behind due to the ever-increasing cost of living, and they are fearful of a future that could include the OBA bringing back Pathways to Status.

“If the OBA government cannot even realise that the economy is not working for the majority of Bermudians, how can they be trusted to build an economy that works for you?”

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Comments (38)

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  1. watching says:

    “A recession is when the economy declines significantly for at least six months. That means there’s a drop in the following five economic indicators: real GDP, income, employment, manufacturing and retail sales. People often say a recession is when the GDP growth rate is negative for two consecutive quarters or more.”

    hence, this was a recession, Bob! Stop being fuzzy.

  2. San George says:

    The PLP is being nice calling it a recession – it is really a Depression. When our largest asset, our homes, declines significantly in value, hotels being taken by banks and major loan delinquencies; you wise heads give that a name. Everywhere else in the world that is a Depression – not in Bermuda.

  3. OMG!!!!!!!! says:

    Ask anyone who works with figures and they will smile about the BS

    “Brought 10,000 people to the Event Village on Front Street”

    LOLOL fuzz figures

  4. Breathe says:

    Mr. Richards, there’s still a recession in my house and that’s what matters to me. Every time you point to some established business owned by some family of privilege as evidence of the success of your policies it makes me furious. You and your business friends never met a tax break or concession you didn’t like. It is clear to me and I hope to many others who you really work for; and it’s not ordinary people like me.

  5. Know it All says:

    GDP stats over 2 successive, back to back quarters has nothing to do with 2015 results…Bob be sipping on the politrix tea today.

    • stop mis-info says:

      i think it has everythhing to do with 2015 results! GDP is exactly camparable to the year before (Q3,Q4-2015). He is saying that economic activity waas so high last year due to preparation of LV race that this year the numbers are slightly below. Not exactly a recession

      I so tired of everybody knowing everything! too many “street” accountants, too many “street” economist.

      Shalom

  6. Rhonda says:

    An explanation bu Bob, doesn’t change the definition of a recession.

  7. Economist and Latin Monitor and BDA Government Report Agree says:

    Contrary to PLP Narrative:

    http://www.latinamericamonitor.com/political-risk-analysis-one-bermuda-alliance-dictate-agenda-following-2017-elections-jan-2017

    http://country.eiu.com/bermuda

    2017 OUTLOOK FOR BERMUDA
    The Bermuda economy in 2017 is projected to grow at a higher pace than 2016, conditional on higher investment in the construction sector, increased economic activity related to the America’s Cup, positive growth in tourism and steady demand for nancial services in the international business sector.
    For 2017 the Government will continue with its two-track strategy to stimulate economic activity and bring much needed control to the public purse.

    https://www.gov.bm/sites/default/files/7333_NATIONAL%20ECONOMIC%20REPORT_Final_Portal.pdf

    There are encouraging signs that Bermuda’s economy is moving in the right direction. The Minister’s de cit reduction strategy has seen the rate of increase in Bermuda’s national debt slow, and the Government remains committed to reducing debt
    as an overriding priority. Preventing sustained increases in the national
    debt is of paramount importance, to maintain Bermuda’s sovereign debt rating and avoid further increases in debt service costs.

    https://home.kpmg.com/content/dam/kpmg/bm/pdf/2017/02/2017-Bermuda-Budget-Final.pdf

    • Double S says:

      Don’t forget to include the April 2017 S&P report which noted:

      The stable outlook reflects our expectations that fiscal deficits will continue to improve, resulting in no significant increase in debt.

      “Real GDP annual growth will be about one per cent in 2017 and the territory will remain a net external creditor in the next two years.”

      It added: We expect broad continuity in economic policies following elections in 2017.”

      The report also contained projections based on best and worst-case scenarios.

      It said: “A sustained return to more robust real GDP growth and greater economic diversification, balanced fiscal results that persist leading to declining debt and interest burdens, or an improvement in our external assessment could lead to a positive rating action.”

      But the report warned: “A return to economic contraction that leads to a resumption of large Government deficits and increasing debt and interest burdens or negative banking-sector outcomes could cause us to lower our ratings.”

      _______________________

      Pay attention to the last paragraph. Remember it was Burt who recently stated that the PLP would resume large deficit spending for a limited time to fulfill all their election promises (history repeating itself).

    • Unbelievable says:

      @ Economist and Latin Monitor and BDA Government Report Agree……..No one on this forum who is against the OBA will even read this. They just don’t want to hear the truth. It needs to rammed down their throats. It probably still wouldn’t make difference.

  8. Doggystyle says:

    Bob steady at the wheel and all the plp have to say is we in a recession lmao arm chair plp economics ain’t got a clue

    • When ya making over $100 Thousand a year as your side hustle, you can say dumb S!@# like this.

      • Onion Juice the economist says:

        Love to hear what you will be spewing when 2017 fiscal results are in.

        You may wish to temper your sage comments because humble pie sometimes can be a bit tart!

        Blessings abound.

      • wahoo says:

        C.F. says dumb sh#t and he earns way over $100 Thousand.

      • Earth watch police says:

        The union leaders make way more than that .

        • i'm just saying, what most already know says:

          2017 will be great…..2018 will see a hugh drop….as the expenses from AC kicks in…

          BELCO just confirmed that Belco users will pay the cost their part in AC..so add that to the true cost of hosting.

          Fact AC has left the coffers of every host country in debt.
          no doubt that some, few in the private sector will score big time.
          and others far less, but the course correction will hurt the lower income earners the hardest..with added Taxes… when it is all said and done..

          The oba would be happy to jump ship this election.

  9. Janice says:

    The PLP fudged tourism numbers for years and had as many ministers of tourism as hot dinners

  10. Janice says:

    1.8 and 2.4 % drop or difference wow is that worth crying about it certainly does not mean a recession polittrickin I would say

    • nottheonion says:

      Whilst I am suspicious of how those numbers were calculated, 1.8% and 2.4% are actually pretty big.
      However, stay aware that the 2 parties will try to hammer each other like 2 idiots, and that all means of doing so are ‘good’.

  11. 32n64w says:

    Where and when did former junior minister Burt hold press conferences announcing the PLP induced 6 year recession and +20 quarters of negative growth? More inconvenient truths he’s desperate to ignore.

    He obviously can’t run on such an abysmal and we’ll document fiscal record of social and fiscal ineptocracy so chooses to cherry pick two data points for shallow political point scoring. Childish and immature, qualities any reasonable voter should firmly reject.

  12. O.M.G says:

    To bad they did not worry about that when they where in power or there people. What did they really do for there people. They started losing job Back when they took over chasing business out of here. They promised hotels but nothing happened how you have all forgot the b***** that went on. And believe me it won’t charge if they get back in it’s all about the power of the money not the people.
    I praise all those out there trying to make this country into a better place and all the hard work is trying to make it into a better place

  13. Sandgrownan says:

    The last thing Bermuda needs is a return to incompetence under the PLP

  14. Cowpoly says:

    I agree that there are two Bermudas..one where we remember what actually happened when PLP/Brown ran the country into bankruptcy and the other Bermuda which believes no matter what the OBA/UBP does is wrong.

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