Finance Minister Curtis Dickinson warned today that unemployment was expected to rise while retail sales look set to decline even more in the wake of the economic impact of the coronavirus pandemic.
Speaking at a news conference this morning (March 16) the Minister said the Bermuda Government could raise the debt ceiling by $150 million to combat this deadly virus and its anticipated impact on Bermuda’s ailing economy.
“The current actions being taken as part of the Ministry of Finance’s COVID-19 fiscal plans are as follows: to provide financing to supplement reduced revenues, the ministry is taking necessary actions to secure emergency liquidity lines of credit with local financial institutions.
“The required discussions have been held with all relevant parties to gain the necessary approvals including an associated $150 million increase in the debt ceiling. These facilities will be used only when it is absolutely necessary,” said the Minister.
“The ministry will provide additional funding to the Department of Financial Assistance to further assist Bermudians unemployed.
“Lower priority expenditures will be curtailed to ensure that spending needed for COVID-19 matters can be maintained.
“To that end, over the next three months, Government will delay the start of any capital projects that have not commenced; institute an immediate freeze on posts that are not required to address COVID-19 or to protect Bermuda’s national interest; continue the ban on non-essential Government travel and reduce all discretionary spending including training, material and supplies, clothing and uniforms.”
The Minister stressed that no spending reductions will be made that “jeopardise the health, safety and security of the people of Bermuda”.
“To be clear, protecting Bermuda from the health and economic impact of COVID-19 is our priority.”
“Additionally, the Ministry of Finance has stepped up its monitoring of global economic conditions and its interaction with key stakeholders in the public and private sectors.
“To this end, the ministry has already had very productive meetings with the Bermuda Bankers Association and is in regular communication with our union partners, representatives of key employers and other critical public agencies.
“We have sought their input in fine-tuning contingency plans in the event of a severe downturn in Bermuda’s economy, while also having discussions with them in relation to appropriate actions they should take to assist the people of Bermuda during this challenging time.
“The future is not clear but we do anticipate that there will be economic and fiscal consequences for Bermuda stemming from COVID-19,” he added.
“The implications for Bermuda are likely to include a downturn in visitor arrivals, a reduction in consumer spending, retails sales may slow further in 2020, slower growth in Bermuda’s economy, a rise in unemployment and a reduction in government revenues.
“The Ministry of Finance will continue to evaluate probable economic scenarios including economic circumstances that may result in even more severe reductions in business conditions, employment and government revenue.
“This will allow for further temporary emergency measures to be taken if necessary, so that Government can maintain essential public services and continue to service the needs of our community.”
Moving forward, he said: “I am confident that Bermuda and her people will emerge from this crisis stronger.
“Together, we have already considered a wide range of possibilities and made plans to address them in strengthening Bermuda’s capacity to weather this storm and the economic fiscal horizons.”
He also thanked Bermuda’s healthcare professionals, doctors, nurses “and everyone working hard on the front line during this difficult time”.
The Minister also expressed confidence that with the support of the Bermuda public, the island could “navigate” the challenges that lie ahead.