After years of recession, Bermuda’s economy is showing “some signs of a rebound” — but a recovery isn’t guaranteed, according to financial advisers Anchor Investment Management.

And with widespread uncertainty over foreign citizens acquiring Bermuda Status, the company’s recommendation of an immigration policy including “a path to citizenship” could prove contentious.

The company has spotted “the best growth rate in more than seven years” in imports to the Island, in its latest Bermuda Economic Update.

Population decline, and an anticipated surge in Bermuda’s seniors, are the primary demographic factors hitting the local economy.

Anchor has tracked cargo coming into the Island and found a 4.4 percent rise in container activity through the end of May — along with a rise in retail sales and air arrivals.

Retail “appears to be improving” after a four-year decline: at the close of April, retail sales over the previous 12 months showed a 0.4 percent rise on the preceding year.

Citing unofficial sources, Anchor observed a 4.5 percent rise in air arrivals for the year to date: there were 19,251 air visitors through April, up from 16,762 for 2013.

The company identified a number of top challenges to economic recovery, however.

Overcapacity in the Island’s crucial reinsurance sector is impeding growth, along with deleveraging — the technical term for the unwinding of debt.

The company called for fiscal consolidation to improve the Island’s economic climate.

In the July 4 report, Anchor said the positive signs of recovery came after five years of economic contraction for Bermuda.

The financial watchdog stopped short of endorsing the rebound as leading to a sustainable economic recovery, however.

Anchor stated that, overall, Bermuda’s economy contracted almost 16 percent from 2008.

“We forecast that the economy boomed in the second half of 2013 and real GDP will grow 0.6 percent in 2014 and 0.5 percent in 2015, despite some risks of a fiscal drag due to a reduction in government spending,” the report added.

International business is unlikely to bring significant job growth, although the insurance linked securities (ILS) sector is expected to create some new jobs.

The report also endorsed changes in immigration and job policies, saying they had “attracted some jobs to the island and slowed the expat exodus”.

Construction spending remains weak, and reports of new hotel developments will require financing before boosting growth in the sector.

“We anticipate that an announcement from the government on new casino legislation may spur some hotel development, but new casino hotel funding is still difficult,” the report added.

Commercial construction is expected to remain slow for “many years” due to the glut in office space, and home construction is depressed due to a “significant” drop in the local population.

“Unfortunately the decline in the population has increased the budget deficit and is placing more pressure on healthcare costs and social programmes,” the report continued.

“The recent uptick in freight trends is encouraging and may indicate that the population trend has stabilised and may be increasing.”

The company did not predict high growth in tourism, forecasting growth rates of two to three percent.

Overall, Bermuda is “exiting recessionary territory”, but Anchor predicted a slow economic recovery for the Island. The main factor impeding Bermuda’s economy is a 7.6 percent decline in population over the last five years.

“This, coupled with looming fiscal consolidation as the Government of Bermuda looks to balance its budget, will dampen the pace of the recovery.”

The company suggested “less emigration and more immigration” as a means of arresting the demographic forces that slow the Island’s growth, but cautioned that it could only be achieved by improving the local jobs market.

And, in a move likely to be seen as controversial, it suggested attracting investment and businesses through “an open and transparent immigration policy that has a path to citizenship”.

“Otherwise Bermuda could risk remaining a transitory nation subject to the whims of the global economy,” the report concluded.