exported for investment purposes.

Government officials said this week that the relaxation of foreign exchange controls has enabled Bermudians to invest increasing amounts of investment capital abroad, contributing to an outflow of funds and a negative balance in the capital account.

"Bermuda: 1997 Economic Review'', the document released annually in tandem with the Finance Minister's Budget Statement, said: "Capital outflows for the first three quarters of 1997 were $195 million, compared to $48 million for the same period in 1996.'' That equates to a 306 percent increase.

The report also noted that for efficient fiscal planning and management, more accurate information is required from a well-developed statistical data-base.

Overseas investment rises As a result, the Statistics Department this coming fiscal year, will further develop the national income accounting framework through a detailed economic activity survey and a project to calculate the Gross Domestic Product (GDP) using the output method.

Meanwhile, the report estimates that Caribbean and Latin America countries (the Western Hemisphere's developing economies) had their best economic news in 30 years last year.

Finance Ministry officials believe that the group of countries that includes Bermuda's Caribbean cousins, produced growth close to 4.1 percent in 1997 as they continued a battle with inflation, holding it to 13.5 percent.

Some $45 billion in foreign investment was pumped into the region during the year, although the regional current account deteriorated sharply, reaching a deficit of $60 billion.

That was as a result of the huge increase in the region's trade deficit, which soared from $4.6 billion in 1996 to $22 billion in 1997. Economies that have more of a direct effect on Bermuda remained strong, a key element of the optimism evident in this year's budget projections.

There has been considerable good economic news from out of the US, the neighbour that provides 85 percent of Bermuda's visitor arrivals and 73 percent of all imported goods. In Canada, economic growth gathered momentum, fuelled by low interest rates and strong exports to the US. Fiscal restraint by both federal and provincial governments appear to be solving the high deficits and level of public debt. Unemployment has been lowered.

Despite consolidation in the UK and rising interest rates, Britain enjoyed some economic successes. The financial crisis in Southeast Asia, that began in Thailand during the summer, spread quickly to Malaysia, Indonesia and the Philippines. A banking crisis ensued as regional banks, it was learned, had lent their money unwisely and excessively, resulting in a mountain of bad debt.

The crisis became more serious in the 1997 fourth quarter when the currency value, equity markets and financial institutions of South Korea and Japan faced significant pressures.

These developments are expected to have seriously negative ramifications on global growth rates in the year ahead.

BUSINESS BUC