HOVENSA Shutdown Leads to Significant Drop in US Virgin Islands’ GDP

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Above: the USVI

By the Caribbean Journal staff

The real GDP of the United States Virgin Islands fell by 13.2 percent in 2012, according to the United States Bureau of Economic Analysis.

That was due almost entirely to the shutdown of the HOVENSA oil refinery in early 2012, which was the territory’s single-largest employer and primary supplier of fuel.

It was also the largest oil refinery in the Caribbean region. Its fate remains in the air as the government works to hammer out a sales agreement.

Excluding the imports, exports and inventory investment of the petroleum refining industry, the territory’s GDP actually increased by 2.6 percent, driven by growth in rum exports.

The latter got a boost due to the recent opening of a new distillery producing Captain Morgan Rum.

Territorial government spending also declined in 2012, the BEA said.