{"id":816221,"date":"2026-10-28T06:08:37","date_gmt":"2026-10-28T06:08:37","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/816221\/"},"modified":"2026-10-28T06:08:37","modified_gmt":"2026-10-28T06:08:37","slug":"two-bermudas-gap-widening-the-royal-gazette","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/816221\/","title":{"rendered":"\u2018Two Bermudas\u2019 gap widening – The Royal Gazette"},"content":{"rendered":"

\t\t\t\t\t\t<\/p>\n

David Annan, the Bermuda College economics lecturer (File photograph)<\/p>\n

Economists have pointed to alarming trends for Bermuda\u2019s economy, including a softening in tourism and a growing disparity between the \u201chaves and the have-nots\u201d.<\/p>\n

Bermuda is increasingly divided into two economic realities, it was observed, and the gap between the \u201ctwo Bermudas\u201d is widening.<\/p>\n

Craig Simmons, was one of two esteemed economists asked to consider new perspectives on the recent release of annual figures which showed Bermuda\u2019s gross domestic produc<\/a>t, rose 1 per cent, on an inflation-adjusted basis, to $7.2 billion in 2025.<\/p>\n

David Annan, the Bermuda College economics lecturer, was also asked about the lacklustre tourism numbers, as exhibited in the specific hospitality and accommodation sector in 2025.<\/p>\n

A tourism report<\/a> in February said the tourism industry was responsible for less than 5 per cent of the island\u2019s economy in 2024.<\/p>\n

During last week\u2019s press conference, Jason Hayward, the Minister of the Economy and Labour, highlighted how 2025 was the fifth consecutive year of growth.<\/p>\n

But that growth has narrowed remarkably, and he acknowledged there were \u201careas of the economy where performance has been weaker\u201d.<\/p>\n

Dr Annan said: \u201cNominal GDP rose 6.5 per cent, but 5.4 points of that was price increases. When the minister says growth beat the Ministry of Finance\u2019s estimate, that is mostly an inflation effect, not more output.\u201d<\/p>\n

The growth in real GDP has been on a precipitous three-year decline, but with regard to the small increase in 2025, Dr Annan pointed out: \u201cOf the $74.8 million real increase, three industries supplied 78 per cent: financial and insurance, international business and construction.<\/p>\n

<\/p>\n

Craig Simmons, retired senior lecturer at Bermuda College (File photograph)<\/p>\n

\u201cEight of 19 industries shrank. Part of the remaining growth came from public administration (government sector), mostly from higher personnel costs.\u201d<\/p>\n

Mr Simmons, Professor Emeritus, who lectured at the Bermuda College for 35 years before retiring in 2024, commented: \u201cBermuda is increasingly divided into two economic realities.<\/p>\n

\u201cThe gap between working-class\/blue-collar incomes and white-collar incomes continues to widen, as documented in the Employment Briefs 2020\u20142026<\/a>. From 2013 to 2025, working-class\/blue-collar incomes declined by double digits, while white-collar incomes increased by double digits.\u201d<\/p>\n

The prominent Bermudian economist pointed to a Bermuda savings rate of 50 per cent, meaning that residents save an average of half their after-tax income.<\/p>\n

But the figure, he said, masks a sharp disparity as evidenced by the Household Expenditure Survey data, which indicates that low-income households save nothing, giving them a savings rate of 0 per cent.<\/p>\n

Further, he pointed to the shifts in economic activity: \u201cAfter adjusting for inflation, consumer spending, one of the largest components of GDP, has declined since 2023.\u201d<\/p>\n

And with regard to export sectors, Mr Simmons said: \u201cInternational business is accounting for a growing share of overall economic activity, while tourism\u2019s share is shrinking.\u201d<\/p>\n

Relatedly, Dr Annan noted that hospitality was the largest decliner in the economy for 2025.<\/p>\n

He said: \u201cAccommodation and food service fell 5.6 per cent, or $15.9 million \u2014 more than any other industry. The [statistics] department attributes $10.4 million of that to food and beverage service, so this is mainly a restaurant story rather than a hotel story.\u201d<\/p>\n

Air arrivals, he noted, were up 1.7 per cent to the end of July, but there were storm-related cancellations from August to early November and reduced US airlift.<\/p>\n

He referred to the 12.2 per cent fourth-quarter drop in leisure air arrivals, and 12.7 per cent drop in cruise passengers for the year, partly because of King’s Wharf works and weather cancellations.<\/p>\n

Dr Annan said: \u201cCruise passengers spend heavily in restaurants and shops. Is it cause for concern? Yes, moderately.<\/p>\n

\u201cTotal visitor spending rose 3.5 per cent, and residents spent 6.3 per cent more at restaurants and hotels, yet the industry\u2019s value added still fell.<\/p>\n

\u201cThat suggests operators\u2019 costs, for food, energy and labour, are rising faster than their prices.<\/p>\n

\u201cWages make up about 69 per cent of the sector\u2019s value added, so this is where Bermudian workers feel it first.<\/p>\n

\u201cRegional peers also did better. The Cayman Islands and The Bahamas each grew around 2.8 per cent, and The Bahamas increased cruise arrivals by nearly 14 per cent, while ours fell.\u201d<\/p>\n

\u2022 To read the 2025 GDP report, see Related Media<\/p>\n

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