A three-strong panel of financial experts has highlighted “slippage” in Bermuda’s bid to balance its books.

David Peretz, chairman of the Fiscal Responsibility Panel, said: “The last Budget showed a little bit of slippage — whereas previously the objective was to reach Budget balance by 2018-19, now it’s 2019-20.

“From our point of view, that’s not a welcome development, but that’s happened.”

Mr Peretz, an independent consultant on international finance who has worked at the UK Treasury the International Monetary Fund and the World Bank, added it was the group’s first visit to Bermuda since the government changed in July.

He said: “We are very pleased that the new government has followed the old one in committing itself to basically the same objectives.”

Mr Peretz said the arguments in favour of reducing Bermuda’s Government net debt — now close to $2.5 billion and with 17 per cent of Government income spent on debt service — were “as strong as they were”.

He added: “But more important is that the new Government has committed itself to the same objectives, which is good news.”

Jonathan Portes, principal research fellow at the UK National Institute of Economic and Social Research, said he had seen “quite a lot of common ground” between Government, the business world, analysts and trade unions who “all shared an understanding of Bermuda’s position”.

Mr Portes said: “There are good things going on in Bermuda, but it’s facing some long-term challenges.”

The group was speaking in advance of its full report, the third of its kind, due to be released before Christmas.

Mr Peretz said: “What we have also done each year is look at the risks facing the island.”

He added the biggest risks include moves towards US tax reform, the risk of blacklisting and the upcoming assessment of Bermuda’s anti-money laundering regime.

Mr Peretz added: “If any of these risks were to materialise, the island is very badly placed to deal with it due to the Government debt.”

And he warned: “If any one of these went badly wrong it could be very bad news for the island.”

Other dangers highlighted included the massive cost of healthcare in Bermuda and a pensions black hole caused by underfunding.

Mr Peretz said some of the risks, including a poor grade on anti-money laundering, had “subsided a bit” — but that a good report was “not yet certain”.

Mr Peretz said that the Paradise Papers — a massive release of documents hijacked from Bermuda-founded law firm Appleby — had focused attention on the island and helped fuel “a general rise in protectionism around the world.”

But he added: “Although the Paradise Papers have caused a lot of fuss, Bermuda has not been blacklisted.

“It’s been greylisted and Government has been given a year to do something about companies here without any substantive presence.”

Mr Peretz said that Bermuda had “quite a good record” on transparency.

He added: “It means nobody can hide their money here and there is agreed reporting between tax authorities and Bermuda is recognised as having a very good record on that.

“I don’t think the overall assessment has changed very much from last year. Some things have got better, some things have got worse.

“A real plus is that there has been a change of Government with no real change in objectives.”

Peter Heller, retired deputy director of the IMF’s fiscal affairs department and an expert in pensions, healthcare and long-term demographic trends, said he had seen “good thinking going on” on the island over healthcare costs and long-term care.

He said: “That gives me more confidence than last year — I’m seeing some real change there.”