Bermuda recorded a current account surplus of $548 million in the third quarter of 2008 — a rise of 30 percent compared to the same period the previous year — despite a plunge in tourism revenue.

The surplus, which reflects the difference between receipts earned by Bermuda individuals and entities and expenditure on goods and services from elsewhere in the world, rose on the back of falling oil prices and fewer imports, Government Balance of Payments figures showed.

During the first six months of 2008, the surplus decreased by an average 16 percent, as oil prices soared and imports continued to climb. In the first quarter the surplus was $244 million and in the second, $371 million.

The price of crude peaked at $147 a barrel in July and has since plummeted to below $35. The huge decrease helped to cut Bermuda's payments to the rest of the world and offset the plunging contribution of the tourism industry.

The commentary with the Government figures suggests that the boosting effect from low oil prices will be temporary. "As with any business cycle, the price of oil will eventually rise," the commentary stated.

"Similarly, while lower oil prices should have helped US businesses to invest, expand and demand a higher level of Bermuda-based services, the credit crunch and fear by the banks to lend money has counteracted this.

"These two factors will pose challenges to maintain a growing account surplus in Bermuda for as long as the US recession lasts."

Travel services receipts fell by $32 million in the third quarter, reflecting a 22.5 percent decline in cruise and air arrivals. Demand from US residents for Bermuda travel services has declined in all the first three quarters of 2008 compared to the previous year. Year-to-date travel earnings now average 29 percent of total service receipts, compared to 35 percent for the first nine months of 2007.

As the economic downturn began to bite in the July through September period, payments and receipts for services both fell. Payments fell four percent to $278 million, while receipts from service transactions totalled $444 million a fall of three percent.

Residents paid $267 million for imported goods in the third quarter, $15 million less than in 2007. The value of fuel imports plummeted by 17 percent during the three months, while food imports decreased 4.7 percent. The largest decline was in the transport equipment sector, which fell 51.6 percent.