Tmp 1030 2-25-2013_14854_

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Tmp 1030 2-25-2013_14854_

  1. 1. Bermuda’s EconomyBackdrop to the 2013 BudgetChamber of CommerceFebruary 2013ChamberThe BermudaOf Commerce
  2. 2. Bermuda EconomyRealities behind the budget– Shrinking tax base– Tight bank lending– Growing public service costs– Increasing deficit and other liabilities
  3. 3. 2011 HighlightsGross Domestic Product• Third consecutive year ofdecline• Economic growth stifledby job losses andbusiness closures• Ten of fifteen industriesshrank• Strongest impact felt inConstruction andInternational Businesssectors2009 2010 2011$5,806million$5,757million$5,557millionData Source: Bermuda Department of Statistics
  4. 4. Bermuda EconomyUnbalanced employment : wealth-consuming activities aregrowing…Data Source: Bermuda Department of Statistics
  5. 5. Bermuda Economy…while wealth creating activities shrinkData Source: Bermuda Department of Statistics
  6. 6. Bermuda EconomyBanks 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. 7. Bermuda EconomyThe cost of Government employees isrising…Full cost includesretirement benefits andspecial compensatedabsences.Data Source:Consolidated FinancialStatements and BudgetBooks
  8. 8. Bermuda Economy…and the price of their future pensions andhealth benefits is growingFigures in MillionsData Source:Consolidated FinancialStatements and BudgetBooks
  9. 9. Bermuda EconomyBermudian population is ageing …05,00010,00015,00020,00025,0002000 2005 2010 2015 2020 2025 2030Number of Bermudiansaged 65 or olderNumber of Bermudiansaged 15 or underData source: Bermuda population projections 2000 - 20309
  10. 10. Bermuda Economy...resulting in fewer working taxpayers05,00010,00015,00020,00025,00030,00035,00040,0002000 2005 2010 2015 2020 2025 2030Total dependent BermudiansBermudian Working populationData source: Bermuda population projections 2000 - 2030 10
  11. 11. Bermuda EconomySolutions:• Private industry growth• Smaller public sector• Influx of new workers• Influx of foreign capital to alleviatedebt stress• Privatizations

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