The Virgin Islands economy continued to contract in 2014, although at a much slower rate than in the previous three years, the U.S. Bureau of Economic Analysis reported today.
The estimates of Gross Domestic Product for the U.S. Virgin Islands show that real GDP — adjusted to remove price changes — decreased 0.6 percent in 2014. For comparison, real GDP for the U.S. (excluding the territories) increased 2.4 percent in 2014.
The decline in the Virgin Islands economy primarily reflected a decrease in government spending. That decrease reflected declines in compensation paid to federal government employees and in federal government construction activity.
Exports of goods increased significantly, primarily due to growth in exports of petroleum and petroleum products. However, this growth was mostly offset by growth in imports of petroleum — a subtraction item in the calculation of GDP — and by a drawdown of inventories.
Exports of services, which consists primarily of spending by tourists, contributed positively to the economy. Growth in tourism reflected an increase in visitor arrivals of 4.2 percent.
In 2013, the Virgin Islands’ economy contracted by 5.3 percent. That followed a 15 percent decline in 2012 and an 8.2 percent decrease in 2011.