Guam Economic Growth Slows, Lagging Behind US As A Whole

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Pacific Islands Development Program, East-West Center With Support From Center for Pacific Islands Studies, University of Hawai‘i

2014 figures show drop from previous years down to 1% growth

By Gaynor Dumat-ol Daleno

HAGÅTÑA, Guam (Pacific Daily News, Dec. 3, 2015) – Guam’s economic growth slowed in 2014, according to the latest data released Thursday by the U.S. Department of Commerce’s Bureau of Economic Analysis.

The island’s economy grew by 1 percent in 2014, slower than the island’s 1.7 percent growth in 2013 and 2 percent jump in 2012, according to the federal analysis.

The nation’s economic growth was at 2.4 percent last year.

The size of Guam’s economy was $5.11 billion last year, a slight uptick from $5.07 billion in 2013.

The private sector’s fixed investments, or spending by businesses on construction and equipment, increased 6.7 percent, to $1.3 billion.

Among the notable private sector investments, according to the federal report, are the Dusit Thani Guam Resort construction, and the island’s first private hospital, the Guam Regional Medical City. Both projects have been estimated to cost more than $400 million combined.

Government construction projects also contributed to growth in 2014, including the 48-bed, $158 million new Naval Hospital Guam, as well as federally funded, but locally executed road construction projects, according to the report.

Guam’s "exports of services," which consist primarily of spending by tourists, grew 4.8 percent to $940 million.

Tourism’s growth was fueled by a surge in South Korean visitor arrivals and average spending, even though the No. 1 source of tourists for Guam, Japan, posted a decline in arrivals, Pacific Daily News files show.

The amount of money that leaves the local economy, through the import of goods and services, outpaced the revenue coming in through tourism.

Guam imported $2.6 billion worth of goods and $767 million worth of services last year. That means for every $3 of money leaving the island economy in the form of imported goods and services, less than $1 in tourism money flows into the island.

Spending

Consumer spending increased slightly, from $2.92 billion two years ago to $2.96 billion last year, but some of their spending went toward health care.

Federal government spending increased from $1.76 billion to $1.81 billion in the same year over year comparison.

Local government spending, which also included money from Uncle Sam, stayed nearly flat, from $1.13 billion in 2013 to $1.15 billion last year.

Guam’s economic size can be broken down into $31,809 for every man, woman and child who lives on the island, according to the data. Guam’s population was estimated at 160,900 last year.

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