THE U.S. Department of Commerce-Bureau of Economic Analysis in a report said the CNMI’s real gross domestic product decreased by 29.1% in 2020 amid a global pandemic, but increased 16.7% in 2022 and 5.1% in 2021 due to a spike in tourism activities and influx of federal funds.
According to the report, the growth in GDP from 2021 to 2022 reflected increases in exports, government spending, and private fixed investments.
The report stated, “The increase in exports was accounted for by exports of services, which consists primarily of visitor spending.”
Between 2021 and 2022, government spending increased 4.7%, reflecting increases in both territorial and federal government spending, as follows:
–Territorial government spending increased 3.3%, supported by federal grants, including Coronavirus State and Local Fiscal Recovery Fund payments and Education Stabilization Fund payments authorized by the Coronavirus Aid, Relief, and Economic Security Act of 2020; the Coronavirus Response and Relief Supplemental Appropriations Act of 2021; and the American Rescue Plan Act of 2021.
–Federal government spending increased by 22.8%. The increase reflected construction spending associated with the U.S. Air Force’s Tinian Divert Airfield project.
Also in 2022, the report said private fixed investments increased 3.8%, primarily reflecting an increase in business spending on equipment.
But personal consumption expenditures decreased by 3.3%, “reflecting an increase in consumer prices that outpaced the increase in current-dollar private consumption expenditures.”
The BEA also reported that the 5.1% growth in real GDP from 2020 to 2021 reflected increases in government spending and personal consumption expenditures.
According to the report, government spending accounted for 12.71 percentage points of the 5.1% of real GPD while personal spending accounted for 8.22%.
However, the report added, these increases were partly offset by declines in exports and private fixed investments. Exports went down by 8.62%, imports by 6.46% and investments by 0.8%.
Between 2020 and 2021, the report said, government spending increased by 19.2%, reflecting increases in both territorial and federal government spending, as follows:
–Territorial government spending increased 19.9%, supported by federal grants, including Coronavirus Relief Fund payments and Education Stabilization Fund payments authorized by the CARES Act and the American Rescue Plan Act.
–Federal government spending increased 11.2%, primarily reflecting an increase in federal reconstruction activities related to Typhoon Yutu.
Personal consumption expenditures increased 11.1%, supported by government assistance payments distributed to households through the Coronavirus Response and Relief Supplemental Appropriation Act and ARPA funds.
But exports decreased 58.1% and this was accounted for by exports of services, which consisted primarily of visitor spending. Visitor arrivals decreased 85.7% in 2021.
The CNMI’s tourism arrival rates remain way below their pre-pandemic levels.
In his latest e-newsletter, U.S. Congressman Gregorio Kilili Camacho Sablan said the CNMI’s GDP reports for 2021 and 2022 “were delayed because of the lack of audited financial statements from the Commonwealth government and had to rely on estimates.”
He also said that the GDP report “will be the last produced by BEA for the Marianas and other insular areas, as the Department of the Interior has decided to end its support of the work.”
