Grim figures on the impact of the Covid-19 pandemic were revealed last night by the Minister of Finance.

Curtis Dickinson said the island’s total debt had gone up by about $520 million as a result of the double whammy of a plunge in revenues and pandemic-related costs.

But Mr Dickinson also confirmed “very positive news” with the Government’s successful raising of $1.35 billion in new bonds.

He added: “As part of our debt management programme, we split the issue between ten-year and 30-year bonds with equal amounts of capital.”

Mr Dickinson said orders from investors “significantly exceeded” the amount offered.

It also allowed Bermuda to repurchase for cash a portion of bonds to repay its on-island credit line, which resulted in low interest rates — 2.375 per cent for the ten-year bonds, and 3.375 per cent for the 30-year bonds.

Mr Dickinson said it was the first time the island had issued 30-year bonds.

He added there had been “healthy demand from some of the world’s top investors” after a series of virtual meetings last week.

Mr Dickinson said total debt had increased, but the average interest rate on the entire portfolio had dropped by 0.59 per cent.

He told the regular Covid-19 briefing that further details would be released by the ministry later.

He warned the pandemic had had “a profoundly negative impact on Bermuda’s economy — and, consequently, the Government’s fiscal position”.

He added that projections from the 2020-21 Budget had to be ripped up and that the anticipated Budget deficit of $19.8 million would be increased by a significant amount.

The Government’s revenue for the second quarter was $221.6 million, down $58.9 million on the February estimates.

There was also a $20.7 million shortfall in customs duty collection because of the lockdown.

Expenditure, excluding debt service, for the three months to June 30 stood at $281.6 million — almost $50 million higher than Budget estimates.

The sum included $43.6 million paid out through the emergency unemployment benefits programme, as well as $12.4 million for public health expenditure.

All capital projects that had not already started have been halted and Mr Dickinson said savings had been found in areas such as grants and travel.

He added other “temporary overhead savings” were under discussion with unions.

Mr Dickinson said the soaring deficit was “not only unsustainable but economically and fiscally imprudent”, and with gross debt at the end of June standing at $2.82 billion, careful stewardship of the country’s finances was “critical”.

He warned the island’s deficit for the 2020-21 financial year could rise to $225 million.

Mr Dickinson said the ministry’s economic advisory committee continued to meet on a regular basis, and that both the Business Development Agency and the Bermuda Tourism Authority had highlighted “how Bermuda has adapted to the new norm” at the investor presentations.

He added groups and individuals had also pitched in with advice on how to repair the ravaged economy.

Mr Dickinson said the Department of Workforce Development and the Bermuda Economic Development Committee was working with small and medium-sized businesses to stimulate work on the Government’s digitisation projects.

He added that immigration, including work-permit policy, was under review, and more than 50 short-term ideas have been given priority.

Mr Dickinson said that a small committee of Bermudian college students had met him to discuss proposals for economic recovery.

He added: “We have made considerable progress with managing the Covid-19 crisis, and we will continue to do so.”

• To view the full statement from the Minister of Finance, click on the PDF link under “Related Media”