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
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
