Government has been studying worst-case scenarios for the Island's economy should the United States economy not come out of recession in the second quarter, according to the Minister of Finance's economic advisor.

Dr. Andrew Brimmer, the Principal Economic Policy Advisor to the Government, did not reveal what the contingency plans were, and when questioned, said that it was for the Minister of Finance to make any such revelations.

“If the recession in the United States is deep and lasts longer than projected, the adverse impact on Bermuda will also be greater than is now anticipated,” he told a group of businessmen and women at the Bermuda International Business Association's annual general meeting lunch yesterday.

“Under those circumstances, the Government of Bermuda is positioned to adopt counter-cyclical measures to ameliorate the effects of the recession on Bermuda's economy.”

Asked about what the measures were, Dr. Brimmer said he could not answer questions on the subject. And when asked details of the measures Minister of Finance Eugene Cox declined to reveal them. adding that if needed, they would be revealed in the Budget in February.

Mr. Cox. said: “Dr. Brimmer is our economic advisor and I think he gave a comprehensive and well-rounded speech that I think most people will have enjoyed.

‘'We got a glimpse of where we are and where the United States is expecting to be and where we are expecting to be next year.”

Financial Secretary Donald Scott added: “I guess the real thing is we are looking at economic conditions. Clearly the Budget will need to be framed in light of what is probable and what will be the most probable outcome for Bermuda next year.

“So there are considerations of the tax level and also considerations of overall Government expenditure. And as you know that is something the Minister of Finance has complete responsibility for and is almost never likely to give away his secrets before the Budget.”

He added about Dr. Brimmer's speech: “I think he highlighted the real economic risks that Bermuda is facing in the foreseeable future.”

Mr. Cox said that this was an important point, adding: “He said what could be there, it is not there now. It is what could be there. He isn't saying this is happening, he is saying these are the things that can happen and therefore we will take these measures when those things that happen do happen.”

Mr. Scott said: “The other thing is that Government has been looking at the implications of September 11 and the possibility of the deepening recession and the United States and what it might have to do in the event that the recession was deeper and long lasting than most people expect.

“And yes scenarios have been worked out for those things. If there is a need to articulate particular courses of action then the Budget statement will give the Minister the opportunity to put Government's economic policies to work for. Things could change. We still don't know whether or not the economic stimulus package that is being considered in the US Congress - whether a resolution will be arrived at. That will make a tremendous difference. So all of these things need to be considered and are being considered.”