Bermuda's economy is in good shape, Finance Minister the Hon. David Saul told the House of Assembly yesterday.

"Provided Bermudians continue to work together and there is continued moderation in prices charged, or margins set, and in wage negotiations, the prospects for the remainder of 1994 and for 1995 will surely be favourable and will enable Bermuda to overcome the many challenges...that face us in 1995,'' Dr. Saul told the House.

The Finance Minister said the Country had "emerged from the most visible effects of the recession''.

Dr. Saul noted businesses were still feeling recession aftershocks and many companies were "in strict accounting terms...at risk''. And retail sales were disappointing. But overall, he said the news was good.

The economy, measured in Gross Domestic Product, was expected to grow 3.5 percent to four percent this year.

The Country expected 420,000 air arrivals, the highest number since 1990. And the 172,865 cruise ship visitors were the most ever. Taken together, "Bermuda should receive over 590,000 visitors in 1994, making this the best one for visitor arrivals since the record-breaking 1987,'' Dr. Saul said.

"While one may express some disappointment that the growth in the number of air arrivals softened as the year progressed, I would like to emphasise that the `body count' at the Airport or on cruise ships is only one small part of the overall tourism equation.'' The number of bed nights sold by all commercial properties was up by 1.6 percent for the first nine months of 1994, with the large hotels experiencing a 3.3 percent increase. Commercial properties as a group reported the length of stay remained unchanged at 5.4 days, while the Bermuda Hotel Association said the length of stay increased to 4.8 days from 4.5 days in 1993.

Further, Dr. Saul said spending by air visitors increased by 5.8 percent to $388.1 million, while spending by cruise ship passengers jumped 15.6 percent to $39.2 million.

While Bermuda's tourism was never likely to return to the "good old days'' of 1980. it has "begun to reverse the erosion of the sector's contribution to GDP,'' he said.

After its spending increased by 9.2 percent to $392 million in 1993, the international business sector continued its "high level of activity'' in 1994, Dr. Saul said.

At the end of September, there were 8,102 companies registered in Bermuda, marking a 8.2 percent increase over 1993, Dr. Saul said. Foreign currency receipts continue to grow at a healthy pace "and the present picture reveals a balance of payment surplus in excess of $50 million.'' And in construction, new projects worth $16.5 million were started during the first half of 1994, an increase of 70 percent over 1993. Projects completed, at $34 million, were 31 percent higher.

The annual inflation rate had stabilised at 2.2 percent and there were no signs that it would rise sharply, Dr. Saul said.

The volume of retail sales at the end of September was 2.1 percent higher than in the 12 months to the end of September, 1993, he said. But much of that increase was due to a sharp hike in car sales. Boutiques and department stores showed a 0.4 percent decrease at the end of September.