Tmp 1030 2-25-2013_14854_
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Bermuda's economy has been shrinking for the past three years, with GDP declining each year. Several industries have contracted, especially construction and international business. The government's costs are rising as the population ages and there are fewer working taxpayers, increasing the deficit. Banks are also struggling with higher non-performing loans and lower profits. To address these challenges, the document recommends growing the private sector, reducing the public sector size, and attracting new workers and foreign capital through privatizations.
Tmp 1030 2-25-2013_14854_
- 1. Bermudas Economy Backdrop to the 2013 Budget Chamber of Commerce February 2013 Chamber The Bermuda Of Commerce
- 2. Bermuda Economy Realities behind the budget Shrinking tax base Tight bank lending Growing public service costs Increasing deficit and other liabilities
- 3. 2011 Highlights Gross Domestic Product Third consecutive year of decline Economic growth stifled by job losses and business closures Ten of fifteen industries shrank Strongest impact felt in Construction and International Business sectors 2009 2010 2011 $5,806 million $5,757 million $5,557 million Data Source: Bermuda Department of Statistics
- 4. Bermuda Economy Unbalanced employment : wealth-consuming activities are growing Data Source: Bermuda Department of Statistics
- 5. Bermuda Economy while wealth creating activities shrink Data Source: Bermuda Department of Statistics
- 6. Bermuda Economy Banks are squeezed by higher non- performing loans and lower profits. Note: all data in percentage terms, Data Source: The Bermuda Monetary Authority; Quarterly Banking Digest
- 7. Bermuda Economy The cost of Government employees is rising Full cost includes retirement benefits and special compensated absences. Data Source: Consolidated Financial Statements and Budget Books
- 8. Bermuda Economy and the price of their future pensions and health benefits is growing Figures in Millions Data Source: Consolidated Financial Statements and Budget Books
- 9. Bermuda Economy Bermudian population is ageing 0 5,000 10,000 15,000 20,000 25,000 2000 2005 2010 2015 2020 2025 2030 Number of Bermudians aged 65 or older Number of Bermudians aged 15 or under Data source: Bermuda population projections 2000 - 2030 9
- 10. Bermuda Economy ...resulting in fewer working taxpayers 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 2000 2005 2010 2015 2020 2025 2030 Total dependent Bermudians Bermudian Working population Data source: Bermuda population projections 2000 - 2030 10
- 11. Bermuda Economy Solutions: Private industry growth Smaller public sector Influx of new workers Influx of foreign capital to alleviate debt stress Privatizations