Just-released economic data shows that difficult conditions are persisting through 2013, Minister of Finance Bob Richards said in a public release of information about Bermuda’s financial state.The data showed that Government revenues tracked higher than Budget estimates during the first half of the fiscal year through September 2013, but public spending was also tracking 2.3 percent higher than projections. Mr Richards added: “ ... there are some positive signs that certain sectors of the economy are improving as we move towards the end of the year. The Ministry expects that the corrective measures outlined in the 2013/2014 Budget Statement, as well as other future initiatives, will result in improved economic conditions in the medium-term.”The Ministry of Finance release of the economic numbers stated: “In accordance with Government’s commitment to effecting ongoing improvements in transparency and it’s reporting on the fiscal and economic affairs of the country the Ministry of Finance today (Thursday) reported on the 2013/14 first half fiscal performance and provided a midyear economic review 2013.”The Ministry’s press release stated that 2013/14 first quarter fiscal performance headline numbers for the 2013/14 national budget were: a revenue target of $871.2 million; current expenditure of $1.1 billion, including debt service; capital expenditure of $84.6 million; and a borrowing requirement of $331.6 million (equal to the projected deficit).Revenues for the six months ending September 2013 are $436.8 million; this is $7.6 million (1.8 percent) higher than in September 2012. They stated: “The primary reason for this increase is due to stronger Customs duty collections and this increase resulted in additional revenue of $10.5 million. Payroll taxes to date are approximately $2.6 million above 2012 collections while land tax collections are $3.2 million higher than 2012. These increases more than offset reductions in aircraft registration fees, telecommunication fees and all other fees.”Revenues are tracking above budget estimates, said the Ministry. “The primary reason for this growth relates to strength in the collection of customs duty and payroll tax. Custom duties are tracking six percent above budget estimates, while payroll tax is tracking two percent above budget estimates.”“Current expenditures, excluding debt service, for the first six months ending September, 2013 are $487.8 million; this is $10.9 million higher than was spent during the same period last fiscal year. Government current account spending to date is higher during this fiscal year when compared to the same period last year due mainly to an increase in employer overhead as a result of the Government making its contribution to the Public Service Superannuation Fund which was suspended in 2012/13. “Capital expenditures for the period ending September 2013 are $6.4 million higher than in September 2013. This is primarily due to expenditures for the Heritage Wharf.“Total current and capital spending to date, excluding debt service, is $17.3 million higher than last year’s spend.“Debt service costs for the first six months ending September 2013 are $80.3 million. This represents $42.7 million in interest payments and a $37.6 million transfer to the Government Borrowing Sinking Fund. Debt service to date is $18.5 million more than last year’s period. Interest expenses are $11.6 million higher than 2012. This is principally due to a portion of the 2012 interest expense being paid from the Sinking Fund in 2012 and also due to the Government’s multiyear borrowing strategy, in which $750 million was raised in July 2013“In general, current expenditures are presently tracking 2.3 percent above budget estimates. It should be noted that in certain instances expenditures are not made evenly over the year which may distort actual figures when compared to budget.“Due to the ongoing difficult economic conditions, spending pressures have continued in the social areas with increased demand for financial assistance. Expenditures were above budget in the first six months of 2013 also due to spending pressures in the Ministries of Public Works and Tourism Development and Transport. “For the first six months of 2013/14 Government incurred a deficit of $146.7 million.“On September 30, 2013, central Government gross debt, excluding guarantees, stood at $2.25 billion, $676 million higher than the level at the end of fiscal year 2013. Net debt was $1.77 billion.“The year to date (September) average Consumer Price Index was 1.8 percent and the 12 month average rate was also 1.8 percent. The primary causes of inflation during the last twelve months were increased costs of medical supplies, prescription drugs and health insurance premiums in the Health & Personal Care sector, rising food costs and higher costs for local and overseas tuition in the Education, Recreation & Reading Sector.Key points made in the report included: [naviga:ul][naviga:li]— Imports increased by 8.7 percent in the first two quarter to register at $479.4 million. [/naviga:li][naviga:li]— Air arrivals decreased by 0.5 percent in the first two quarters while the number of cruise passengers fell by 17.6 percent over the same time period. [/naviga:li][naviga:li]— Total visitor spending was down by 2.4 percent settling at $165.1 million.[/naviga:li][naviga:li]— A total of 725 new international companies and partnerships were registered in Bermuda during the first nine months of 2013 representing a 14.7 percent increase over 2012 registrations of 632. Of the 725 newly registered companies, 15 had a physical presence in Bermuda.[/naviga:li][naviga:li]— Total value of new construction projects started fell noticeably from $59.6 million in 2012 to $17.5 million this year. [/naviga:li][naviga:li]— The estimated value of construction work put in place was $80.4 million, an increase of 29.9 percent, which was mainly due to the redevelopment of the hospital. [/naviga:li][naviga:li]— Employment income contracted slightly to $1.659 billion, a decrease of 0.8 percent.[/naviga:li][naviga:li]— Total retail sales for the first nine months of 2013 fell by 0.7 percent or $5.7 million to register at $789.4 million.[/naviga:li][naviga:li]— Bermuda’s Balance of Payments in the first half of 2013 recorded a surplus on the current account of $980 million, which was nearly triple the surplus of $357 million that was recorded in the first half of 2012. The investment income account was the largest contributor to the current account surplus.[/naviga:li][/naviga:ul]Based on figures released by the Bermuda Monetary Authority, Bermuda’s money supply contracted by 1.4 percent year over year at the end of the second quarter. The money supply has declined mainly due to a 5.4 percent reduction in deposit liabilities. The majority of the decline in deposits was the result of lower savings balances which fell by 10.6 percent during the quarter.The Banking sector’s total assets decreased by 2.1 percent at the end of June 2013. The decline was driven mainly by a 6.4 percent year over year reduction in loans and advances, total investments fell by 3.6 percent at the end of the second quarter while customer deposits grew by 17.9 percent for the same time period and the number of standard work permits at the end of September fell from 9,863 in 2012 to 9,221 in 2013, a decline of 6.5 percent.Commenting on the reports, Mr Richards said: “Economic data for the first half of this year are consistent with the expectation in the 2012 National Economic Report of Bermuda that the current difficult economic conditions will persist through 2013.“However, there are some positive signs that certain sectors of the economy are improving as we move towards the end of the year. The Ministry expects that the corrective measures outlined in the 2013/2014 Budget Statement, as well as other future initiatives, will result in improved economic conditions in the medium-term.”