Government has planned for all eventualities says Finance Minister as the down turn hits Bermuda.

And she said Government would do its best to keep the economy ticking as it adopted a 'tenderness in tough times' stance. She told the House yesterday: "In the Ministry of Finance, there is a plan for all probable economic scenarios including the worst economic circumstance that would involve a prolonged recession.

"That scenario has a policy package of emergency temporary measures that would allow Government to maintain essential public services and continue to service public debt."

Ms Cox said the Ministry is closely monitoring Government's cash flows and spending. "For important capital projects, the Ministry is ensuring that funding is available to keep the key projects going. These measures ensure that there is a degree of sustained economic stimulus to the Bermuda economy."

Ms Cox added that the future was neither clear nor bright and there is no magic bullet that can solve the market crisis. Forecasting tough times she said the implications for Bermuda are:

• Slower growth in external and domestic sectors of Bermuda's economy

• Potential flat performance /downturn in visitor arrivals

• Slower growth of international business

• Moderate GDP growth over the next two to three years.

"From a tourism perspective, we anticipate that the deteriorating global economic climate will dampen leisure travel. Our visitor arrivals are likely to be flat at best in 2009. The world financial markets will be a challenge for new hotel developers as it is harder to raise financing and there will be higher costs of credit."

In the international business sector Ms Cox said some companies are still at risk of sub prime losses and investment returns on portfolios have declined and remain depressed. Declines in net profits are expected in the near term said Ms Cox who added that some jobs may be lost although she did not foresee large scale redundancies.

On the domestic sector Ms Cox predicted:

• Lower rises in employment income with the potential for some cutback in consumer spending.

• Retail sales may slow further in 2009.

• There is likely to be reduced construction activity following completion of major projects.

• There will be a rise in unemployment and there is evidence of this already in some areas of the financial service sector.

• Inflation has accelerated over the course of 2008 but should begin to abate in the wake of the drop in oil prices.

She said the Ministry of Finance had marshalled all resources at Government's disposal for the implementation of economic and financial contingency plans should it become necessary.

"The Ministry has also stepped up its monitoring of global economic conditions and its interaction with leading stakeholders in the private sector to obtain views from business leaders about industry sector performance and their outlook. "This helps in fine-tuning contingency plans that may be implemented in the event of a severe downturn in Bermuda's economy."

She added: "Above all however, as Minister of Finance, I have a duty to remain calm and positive about Bermuda's capacity to weather the storms on the economic horizon. "I am confident that Bermuda's people will emerge from this period of travail both wiser and stronger."