BALANCE OF PAYMENTS &

INTERNATIONAL INVESTMENT
POSITION
QUARTER 3/2022
Technical Note: There was a computational error within the exports of Travel Services in the Balance of Payments and International Investment Position (BOP &
IIP) template that also impacted the Exports of Services for the Quarterly Gross Domestic Product (GDP) for Quarters 1 and 2 of 2022. The Quarterly GDP is
being revised to account for the errors detected in the BOP & IIP.

BALANCE OF PAYMENTS Current Account Surplus = $206 million

FAST FACTS The current account surplus stood at $206 million for
Current Account the third quarter of 2022 (Table 1). This represented a
$41 million increase from the $165 million surplus in
The Bermuda current account recorded a surplus of
the third quarter of 2021. The increase in the surplus
$206 million in the third quarter of 2022 (Figure 1
reflected an increase in receipts from non-residents
and Table 1). This represented a $41 million increase
which was larger than the rise in payments.
year-over-year. Contributing factors include:
 The deficit on the goods account expanded Figure 2
by $19 million to $314 million. Q3 2022 Current Account Receipts
Employee
 Services transactions realised a surplus of Comp.
Investment
Income
$82 million, up $14 million year-over-year. 38.3% 8.3%
 Bermuda’s primary income account surplus
increased by $38 million year-over-year to Other
Income
$502 million in the third quarter of 2022. 4.0%
Government Secondary
Figure 1 Income
0.1%
Current Account Balances 5.0%
400 (BD$) million
Travel
339 11.0%
380
300 Services
225 Transport Goods 31.7%
$Million

165 206 1.3% 0.3%

200

100
Goods Account Deficit = $314 million
Year-over-year, the goods account deficit expanded
0 by $19 million during the third quarter of 2022. The
Q3 Q4 Q1 Q2 Q3
value of imported goods increased to $316 million
2021 2021 2022 2022 2022 (Table 1). This growth was reflected mostly in a $21
Quarter million rise in imported goods from Canada. Goods
imported from the United Kingdom and All Other
Financial, Capital, and Reserve Assets Countries each increased by $4 million and $2 million,
Accounts respectively. The value of goods imported from the
Transactions within Bermuda’s assets accounts United States decreased by $7 million. Among the
resulted in a net lending position of $148 million commodity groups, the expansion in imports was
(Table 1). Factors influencing this year-over-year reflected primarily in the imports of fuels and basic
performance include: and semi-manufactured goods which rose by $14
 Bermuda’s net acquisition of financial assets million and $7 million, respectively. Imports of food,
resulted in a decrease of $744 million beverages and tobacco and miscellaneous goods also
compared to an increase of $345 million in increased by $6 million and $4 million, respectively.
2021. There were decreases of imports within finished
equipment, machinery, transport equipment and
 Bermuda decreased its net incurrence of chemicals; the largest decrease being $10 million in
financial liabilities by $922 million this the finished equipment commodity group.
quarter compared to an increase of $242
million in 2021.

DEPARTMENT OF STATISTICS – PAGE 1

 BERMUDA BALANCE OF PAYMENTS & INTERNATIONAL INVESTMENT POSITION

Revenue earned from the exports of goods increased Secondary Income Account Deficit = $63 million
by $1 million to $3 million as more fuel was re- The secondary income account reflects the balances
exported to foreign airlines visiting Bermuda. on donations, insurance claims and other transfers
Services Account Surplus = $82 million between residents and non-residents. The deficit
balance on the secondary income account narrowed by
The surplus on the services account increased $14
$9 million from a year ago due primarily to higher
million during the third quarter of 2022. The larger
premiums on nonlife insurance received from non-
surplus balance reflected mostly gains in the travel
residents.
account balance. The surplus balance on transport
and travel services widened by $21 million due
primarily to the increase in payments made by INTERNATIONAL INVESTMENT POSITION
residents for air passenger services and travel (Tables 2 & 3)
services abroad.
Bermuda’s Net IIP Decreased to $3.3 billion
The net surplus on transactions on business services At the end of the third quarter 2022, the stock of
decreased by $8 million to $92 million as residents foreign assets held by Bermuda residents registered
received less for accounting, bookkeeping and tax above its stock of foreign liabilities by an estimated
consulting services. The balance on insurance $3.3 billion (Table 2). The net IIP decreased by $1.6
services recorded a surplus of $2 million, mostly due billion from the second quarter of 2022.
to the increase in receipts being greater than the
increase in payments during the third quarter of 2022. Foreign Assets dipped to $16.4 billion
Between the second quarter 2022 and third quarter
Primary Income Account Surplus = $502 million 2022, Bermuda residents’ stock of foreign financial
The primary income account reflects balances on assets decreased by $1.7 billion due mostly to
compensation earned/paid to non-residents, and decreased holdings of portfolio and other investments.
income from investments and payroll tax paid by non-
resident companies to the Government. Year-over- Bermuda’s Net Liability Position held at $13.1
year, the surplus on the primary income account billion
increased by $38 million during the third quarter of Bermuda residents’ stock of foreign liabilities
2022 (Figure 3 and Table 1). This rise reflected remained largely unchanged from the second quarter
primarily an increase in net investment income of $26 of 2022. The most noticeable change is a decrease in
million. Employee compensation also recorded an currency and deposit liabilities.
increase of $12 million year-over-year. Other income
decreased by $1 million. IIP by Resident Institutional Sector
The non-financial corporations held a net liability
position of $2.2 billion with the rest of the world at the
Figure 3 end of the third quarter 2022 (Table 3). The general
Primary Income Account Surplus/Deficit government sector’s external liabilities exceeded its
(BD$) million external assets by $521 million, representing a larger
750 600 negative net investment position due to a decline in
590
464 482 502 portfolio investment assets and an increase in portfolio
500
$Million

investment liabilities. Financial corporations held a net

asset position of $6.1 billion due mostly to holdings of
250 portfolio investments in the form of debt securities.
Non-profit institutions serving households also
0 recorded a net asset position of $32 million at the end
Q3 Q4 Q1 Q2 Q3 of the third quarter.
2021 2021 2022 2022 2022
Quarter

DEPARTMENT OF STATISTICS - PAGE 2

 BERMUDA BALANCE OF PAYMENTS & INTERNATIONAL INVESTMENT POSITION

TABLE 1 - BALANCE OF PAYMENTS (BD$) MILLIONS1

Components 2021 2022 2021R 2021R 2022R 2022R 2022P
YTD Q3 YTD Q3 Q3 Q4 Q1 Q2 Q3
CURRENT ACCOUNT PAYMENTS
GOODS IMPORTS (1) 784 913 297 301 285 311 316
SERVICES (2) 617 744 228 224 242 230 272
Transportation 134 185 53 53 51 64 71
Travel 149 195 56 53 56 61 78
Business Services: 334 364 119 118 136 106 123
Insurance Services 55 66 21 19 20 21 25
Financial Services 64 61 20 21 23 23 15
ICT Services 71 78 26 23 33 22 23
Other Business Services 143 159 52 56 60 40 59
Government Services - - - - - - -
PRIMARY INCOME (3) 140 86 62 42 11 12 63
Employee Compensation 17 18 5 6 7 5 6
Investment Income 122 68 57 36 4 8 57
Other Income - - - - - - -
SECONDARY INCOME (4) 328 343 125 117 105 118 119
TOTAL PAYMENTS (5)=SUM(1:4) 1,869 2,086 712 683 644 672 770
CURRENT ACCOUNT RECEIPTS
GOODS EXPORTS (6) 7 7 2 2 2 3 3
SERVICES (7) 815 1,048 296 312 322 372 353
Transportation 33 39 12 12 11 13 15
Travel 106 279 65 37 25 132 122
Business Services: 635 679 219 256 237 226 215
Insurance Services 63 82 20 25 26 28 27
Financial Services 143 141 61 70 39 46 57
ICT Services 23 20 7 9 8 6 6
Other Business Services 406 436 130 152 164 146 125
Government Services 41 51 - 7 49 1 1
PRIMARY INCOME (8) 1,615 1,778 526 524 602 612 564
Employee Compensation 1,241 1,350 414 414 450 472 427
Investment Income 196 242 66 66 67 83 92
Other Income 178 187 46 43 84 58 45
SECONDARY INCOME (9) 169 178 52 70 57 65 56
TOTAL RECEIPTS (10)=SUM(6:9) 2,606 3,012 877 908 983 1,052 976
CURRENT ACCOUNT BALANCES
GOODS -777 -905 -295 -299 -283 -309 -314
SERVICES 198 304 68 88 80 142 82
Transportation -101 -146 -41 -41 -40 -51 -55
Travel -43 84 9 -16 -31 71 44
Business Services: 301 315 100 137 102 120 92
Insurance Services 8 16 -1 6 6 8 2
Financial Services 79 80 42 49 16 23 42
ICT Services -49 -59 -18 -14 -25 -16 -17
Other Business Services 263 277 78 96 105 106 66
Government Services 41 51 - 7 49 1 1
PRIMARY INCOME 1,476 1,692 464 482 590 600 502
Employee Compensation 1,224 1,332 409 408 443 467 422
Investment Income 74 173 9 30 63 75 35
Other Income 178 187 46 43 84 58 45
SECONDARY INCOME -160 -165 -73 -46 -48 -53 -63
CURRENT ACCOUNT BALANCE (11)=(10)-(5) 736 926 165 225 339 380 206
FINANCIAL ACCOUNT
Direct Investment -24 12 -6 -3 2 11 -1
Portfolio Investment -503 -188 -700 -565 937 404 -1,529
Financial Derivatives 69 207 19 27 52 64 91
Other Investment 1,896 959 1,026 360 592 -310 677
Reserve Assets 47 5 7 -6 15 2 -12
NET ACQUISITION OF FIN. ASSETS (12) 1,485 996 345 -186 1,598 171 -744
Direct Investment -13 -24 -19 16 21 -98 53
Portfolio Investment -91 -741 -37 -4 -62 -5 -674
Financial Derivatives -46 -11 -5 -5 -7 -25 21
Other Investment 957 986 303 -413 1,372 -63 -323
NET INCURRENCE OF FIN. LIABILITIES (13) 806 210 242 -407 1,323 -192 -922
TOTAL NET CAPITAL ACCOUNT (14) - - - - - - -
NET LENDING(+)/NET BORROWING(-) 679 786 103 221 275 363 148
(15)=(12)+(14)-(13)
BALANCING ITEM (15)-(11) -57 -140 -61 -4 -64 -17 -58

DEPARTMENT OF STATISTICS - PAGE 3

 BERMUDA BALANCE OF PAYMENTS & INTERNATIONAL INVESTMENT POSITION

TABLE 2 - INTERNATIONAL INVESTMENT POSITION1,2

(BD$) MILLIONS
Components 2021 2021 2022 2022R 2022P
Q3 Q4 Q1 Q2 Q3
ASSETS
BY FUNCTIONAL CATEGORY
Direct investment 117 114 367 375 126
Portfolio investment 12,825 12,819 13,219 13,609 11,640
Financial Derivatives (other than reserves) and ESOs 32 33 59 94 180
Other investment 4,779 4,446 5,471 3,740 4,226
Reserve Assets 227 221 237 239 227
BY INSTRUMENT
Equity and investment fund share/units 3,495 3,567 3,590 3,257 2,826
Debt instruments: 14,452 14,033 15,704 14,706 13,393
Special drawing rights - - - - -
Currency and deposits 1,344 770 1,336 1,071 971
Debt securities 9,673 9,587 10,232 10,966 9,167
Loans 3,311 3,542 3,984 2,527 3,115
Insurance, pension, standardized guarantee 1 1 1 1 1
schemes
Other accounts receivable/payable 124 133 150 141 140
Other financial assets and liabilities 32 33 59 94 180
TOTAL ASSETS 17,980 17,633 19,352 18,058 16,399
LIABILITIES
BY FUNCTIONAL CATEGORY
Direct investment 2,699 2,690 2,572 2,464 2,703
Portfolio investment 4,633 4,625 4,644 4,643 4,778
Financial Derivatives (other than reserves) and ESOs 46 41 34 24 45
Other investment 6,022 5,632 6,053 5,993 5,540
BY INSTRUMENT
Equity and investment fund share/units 3,300 3,277 3,182 3,074 3,311
Debt instruments: 10,054 9,670 10,088 10,026 9,710
Special drawing rights n.a. n.a. n.a. n.a. n.a.
Currency and deposits 5,321 4,843 5,112 5,309 4,919
Debt securities 4,032 4,038 4,035 4,033 4,170
Loans 593 632 738 479 387
Insurance, pension, standardized guarantee 29 31 30 28 28
schemes
Other accounts receivable/payable 80 126 173 177 206
Other financial assets and liabilities 46 41 34 24 45
TOTAL LIABILITIES 13,401 12,988 13,303 13,123 13,065
NET IIP 4,579 4,645 6,049 4,934 3,334

TABLE 3 - IIP BY RESIDENT INSTITUTIONAL SECTOR — (BD$) MILLIONS1

2022 Q3 Households Non-
and General Financial financial Total
NPISHs2,3 government corporations corporations economy
ASSETS 32 2,913 13,250 205 16,399
Direct investment - 92 34 126
Portfolio investment 31 2,546 9,062 - 11,640
Financial Derivatives (other than reserves) and ESOs n.a. - 180 - 180
Other investment 1 367 3,689 170 4,226
Reserve Assets - 227 227

LIABILITIES - 3,434 7,192 2,440 13,065

Direct investment 840 1,863 2,703

Portfolio investment - 3,434 1,037 307 4,778

Financial Derivatives (other than reserves) and ESOs - - 47 (2) 45

Other investment - - 5,268 272 5,540
NET IIP 32 (521) 6,058 (2,235) 3,334
1 Data are estimates only and subject to revision
2. Series does not include stock of household foreign assets and liabilities
3. NPISH: Non-profit institutions serving households
DEPARTMENT OF STATISTICS - PAGE 4
 BERMUDA BALANCE OF PAYMENTS & INTERNATIONAL INVESTMENT POSITION

TABLE 4 - INTEGRATED INTERNATIONAL INVESTMENT POSITION, 20221

(BD$) MILLIONS
Components
Third Quarter 2022

Other
Opening Financial Closing
Changes in
Position Transactions2 PositionP
Position3
ASSETS
BY FUNCTIONAL CATEGORY
Direct investment 375 -249 - 126
Portfolio investment 13,609 -1,911 -58 11,640
Financial Derivatives (other than reserves) and ESOs 94 65 21 180
Other investment 3,740 513 -27 4,226
Reserve Assets 239 -12 - 227
BY INSTRUMENT
Equity and investment fund share/units 3,257 -299 -132 2,826
Debt instruments: 14,706 -1,360 47 13,393
Special drawing rights - - - -
Currency and deposits 1,071 -99 -1 971
Debt securities 10,966 -1,873 74 9,167
Loans 2,527 588 -1 3,115
Insurance, pension, standardized guarantee schemes 1 - - 1
Other accounts receivable/payable 141 24 -25 140
Other financial assets and liabilities 94 65 21 180
TOTAL ASSETS 18,058 -1,594 -64 16,399

LIABILITIES

BY FUNCTIONAL CATEGORY
Direct investment 2,464 238 - 2,703
Portfolio investment 4,643 135 - 4,778
Financial Derivatives (other than reserves) and ESOs 24 21 - 45
Other investment 5,993 -366 -87 5,540
BY INSTRUMENT
Equity and investment fund share/units 3,074 236 - 3,311
Debt instruments: 10,026 -229 -87 9,710
Special drawing rights n.a. n.a. n.a. n.a.
Currency and deposits 5,309 -308 -82 4,919
Debt securities 4,033 137 - 4,170
Loans 479 -82 -11 387
Insurance, pension, standardized guarantee schemes 28 1 - 28
Other accounts receivable/payable 177 24 5 206
Other financial assets and liabilities 24 21 - 45
TOTAL LIABILITIES 13,123 29 -87 13,065
NET IIP 4,934 -1,623 23 3,334
1. Data displayed represents the changes between the previous and current quarters.
2. Transactions refer to any business dealings that occurred during the quarter that lead to an increase or decrease (shown as a negative) in the
investment position.
3. Other changes include: price changes, exchange rate changes, and any other adjustments to the investment position, not otherwise reflected in
transactions.

DEPARTMENT OF STATISTICS - PAGE 5

 BERMUDA BALANCE OF PAYMENTS & INTERNATIONAL INVESTMENT POSITION

WHAT IS THE BALANCE OF PAYMENTS? Financial Account

All transactions associated with changes of ownership in
The balance of payments (BOP) is a statistical statement
foreign financial assets and liabilities of the economy are
that systematically summarizes, for a specific time
included in the financial account. Such changes include
period, the economic transactions of an economy
the creation and liquidation of claims on, or by, the rest
(resident) with the rest of the world (non-resident). Quite
of the world.
simply, the balance of payments covers all economic
transactions between Bermuda and the rest of the world.
It includes the current account and the capital and Payments
financial account.
All monies that are paid by residents to non-residents are
In principle, the current account and capital and financial considered payments.
account should balance each other out. If Bermuda sells
more goods and services than it buys (i.e., if it has a
current account surplus), it has to lend money abroad to Receipts
finance its exports (i.e., run a capital and financial All monies that are received by residents from non-
account deficit). In theory, therefore, the balance of residents are considered receipts.
payments is always zero.

Reserve Assets
Example: Every dollar spent by a tourist in
Bermuda earns the economy $1 in foreign Reserve Assets are those external assets that are readily
currency which can be used to purchase goods available to and controlled by monetary authorities for
meeting balance of payments financing needs, for
and services from overseas.
intervention in exchange markets to affect the currency
exchange rate, and for other related purposes (such as
DEFINITIONS AND NOTES maintaining confidence in the currency and the
economy, and serving as a basis for foreign borrowing).
Balancing Item (Net Errors & Omissions)
A current account surplus or deficit should correspond to Resident
an equivalent outflow or inflow in the capital and
The concept of residency is very important in the BOP
financial account. In other words, the two accounts should
because the BOP is in fact a statement of transactions
add to zero. In fact, as data are compiled from multiple
between residents and non-residents. A unit must have a
sources, the two balance of payments accounts rarely
centre of predominant economic interest within an
equate. As a result, the balancing item is the net
economic territory for at least one year or more to be
unobserved inflow or outflow needed to balance the
considered resident of that territory.
accounts.

Seasonal Workers
Capital Account
Workers from overseas who come to Bermuda to work
The capital account details transactions that involve the for a few months in the year or every year are considered
receipt or payment of capital transfers and acquisitions seasonal workers. Their expenditure on living expenses
and disposal of non-produced, non-financial assets. in Bermuda is included as travel receipts. Similarly, their
income received from employers in Bermuda is a BOP
Current Account outflow under compensation of employees.

Transactions on goods, services, income, and current

transfers are allocated to the current account. Notes
Transactions in exports and interest income are n.a. – Not Available
examples of receipts, while imports and interest Numbers may not add due to rounding
expenses are payments. The difference between P
– Provisional
payments and receipts determines if Bermuda’s current
account is in surplus or deficit.
R
– Revised

DEPARTMENT OF STATISTICS – PAGE 6

 BERMUDA BALANCE OF PAYMENTS & INTERNATIONAL INVESTMENT POSITION

WHAT IS THE INTERNATIONAL INVESTMENT Financial Derivatives

POSITION?* A financial derivative contract is a financial instrument
The international investment position (IIP) is a record of whose value is based on the value of an underlying
Bermuda residents’ investment abroad and non- security such as a stock or bond, commodity or other
residents’ investment in Bermuda. The IIP shows the financial instrument.
balance sheet position of financial claims on non-
residents as assets and non-residents’ claims on Bermuda Insurance, Pension, Standardized Guarantee
as liabilities. The balance between these two positions Schemes
represents the IIP; that is, an excess of assets over
Insurance, pension, and standardized guarantee schemes
liabilities indicates a positive contribution to the nation’s
all function as a form of redistribution of income and
net wealth and the reverse signifies a negative
wealth mediated by financial institutions.
contribution.

Loans
WHY IS THE IIP IMPORTANT TO MEASURE?*
Loans represent the extension of money from Bermuda
The composition of the IIP allows financial analysts to residents to non-residents and vice versa, with an
assess the vulnerability of the economy to changes in agreement that the money will be repaid.
external market conditions. Details from the IIP can
highlight mismatches in maturity of instruments and
currency that can affect an economy’s ability to service Other Accounts Receivable/Payable
debt in the face of shock; financial structure problems; Other accounts receivable/payable consists of trade
solvency problems and dependency problems where credit and advances between Bermuda and non-residents
overreliance on another economy can present contagion and, other miscellaneous receivables/payables.
concerns. Therefore, the IIP allows for a more in depth
analysis behind balance sheet weaknesses that can lead Other Investment
to a modern-day financial crisis. Other investment is a residual category that includes
positions and transactions other than those included in
DEFINITIONS AND NOTES direct investment, portfolio investment, financial
derivatives and employee stock options (ESO), and
Currency and Deposits reserve assets.
Currency consists of notes and coins that are of fixed
nominal values and are issued or authorized by central Portfolio Investment
banks, monetary authorities such as the Bermuda Portfolio investment abroad by Bermuda residents and
Monetary Authority or governments. in Bermuda by non-residents is defined as the holding of
Deposits include all claims that are (a) on the central bank debt or equity securities other than those included in
and other deposit-taking corporations; and (b) represented direct investment or reserve assets.
by evidence of deposit. Notes:
A new table is included on page 5.
Debt Securities The inclusion of an Integrated Investment Position table
Debt securities are negotiable instruments serving as demonstrates the flow of transactions and other changes
evidence of a debt. between reporting quarters.

* Source: IMF Balance of Payments and International Investment

Direct Investment Position Manual, Sixth Edition (BPM6)
Direct investment represents the value of long-term
capital owned in subsidiaries, affiliates and branches by January 2023
Tel: (441) 297-7761,
investors in a position to exercise control or a significant Fax: (441) 295-8390
degree of influence on the management of the enterprise. Department of Statistics
E-mail: statistics@gov.bm
A measure of total investment controlled in Bermuda by Cedar Park Centre,
Webpage:
48 Cedar Avenue, Hamilton www.gov.bm/department/statistics
foreign direct investors, or abroad by Bermudian direct HM 11
investors, indicates the leverage type impact of P.O. Box HM 3015 @BermudaStats
ownership. Hamilton HM MX, Bermuda

DEPARTMENT OF STATISTICS – PAGE 7