Bermuda is in “a better financial position” than expected earlier in the year, the Premier, David Burt, told the House this morning.

Mr Burt, who is also the Minister of Finance, said that when the Budget was presented in February, revenues for the coming year were expected to be $1.03 billion.

Download PDF File

Update on Financial Performance.pdf

He said: “As additional information has now become available, estimates have been further adjusted to reflect a further $32 million increase in revenues and a corresponding $8 million increase in expenditure.

“For the current fiscal year, notwithstanding anticipated losses in revenues from the aircraft registry due to the fallout from the Russia/Ukraine war, the Government’s updated revenue estimates – relating primarily to better than anticipated cruise and hotel occupancy levels – project that the Government will still be able to meet our deficit target.

“This updated forecast is encouraging, given the war's severe impact on global economies.”

According to Mr Burt, a deficit of $245.5 million was estimated for the 2020-21 financial year, but the final figure was $184.2 million – a $61.3 million improvement.

He said: “Therefore, compared to the original 2021-22 estimates as presented in the 21-22 Budget, the updated 2021-2022 forecast anticipates an overall $30 million improvement in the deficit to $95 million, with the revenues estimated to be $63 million higher than initially forecast and overall expenditures $32 million – of which $21 million was unanticipated Covid-related expenses.”

Mr Burt said that there had been “significant” increases in revenues from stamp duty, corporate services tax and vehicle license fees, and immigration receipts, while expenditure had remained “broadly in line with the revised February estimates“.

He added: “The prudent fiscal management policy this Government has committed to and followed since its election in 2017 continues to be a positive factor for this economy.

“We committed to reducing the budget deficit and moving towards a balanced budget.

“Our 2019 projections saw us with a deficit of only $7.4 million; however, the failed Morgan’s Point project inherited by the former administration and the unexpected onset of the global Covid-19 pandemic required us to take significant measures.

“These measures not only protected the health and wellbeing of our residents but also provided relief and financial support to Bermudians, as evidenced by the Unemployment Benefit payments of up to $500 per week to over 10,000 residents severely impacted by the fallout from this pandemic.”

The Premier trumpeted the continued success of international business saying that, during the pandemic, it had offset the decline of the tourism industry.

He said: “As part of our economic strategy, to grow our economy in a prudent and considered way, we have already started expanding into other sectors to diversify our revenue base.

“Bermuda, recognising the opportunities that could exist in the digital asset space, we built an infrastructure that would attract digital asset businesses that wished to be based in a jurisdiction with a robust regulatory regime and encouraged innovation.

“That sector has already seen significant growth. Bermuda now has 15 licensed digital asset businesses, with more companies in the pipeline.

“Additionally, there are currently seven licensed innovative insurers in Bermuda who are leading the charge as we witness the beginning of convergence between traditional insurance and digital finance.”

Mr Burt said jobs in international business had increased in the past two years by ten per cent from 4,020 to 4,441, with the majority of posts being filled by Bermudians.

The Premier also gave assurances that more financial relief measures were in the pipeline.

He said: “This government will be true to that pledge we made in February by bringing a package at the next sitting of the House that will deliver on our promise of more relief to come.”

But he added: “There are limits to the support that the Government can provide, as it is vital for Bermuda’s economic future that the Government meets its budget targets.

“With global inflation set to continue for the foreseeable future and a growing number of economists predicting a recession in the world’s largest economy – and our largest trading partner, the United States, all residents must be wise with their spending choices.

“These are uncertain economic times, especially as we cope with rebuilding our economy following the coronavirus pandemic.

“This government will remain fiscally prudent while also delivering the relief many Bermudians need.

“It is up to all of us in this honourable House and on this island we call home to work together to ensure that Bermuda’s economy works for all.

“The continued delivery of Bermuda’s Economic Recovery Plan has been beneficial to Bermuda, and this government will work to ensure that we do everything that we can to minimise the impact of global events on our economy while providing relief to workers to ensure this economy works for all Bermudians.”