Bermuda's economy faces the prospect of a cold winter, according to Shadow Finance Minister Grant Gibbons.

And as he predicted a slowdown in the next six months he accused the Government of giving a false sense of security by stating that the economy was not slowing down with the rest of the world.

Dr. Gibbons' said he had to speak out after the Finance Minister last week gave the Bermuda economy a clean bill of heath, predicting moderate growth for this year.

He contradicted the Finance Minister and said: "There is a very real possibility that Bermuda will face a significant slowdown in its economy in the next six months.

"And I think Mr. Cox has not been entirely forthright with the community because I think he should be preparing us. I think perhaps with his comments, he has given us a false sense of security."

Dr. Gibbons predicted that the downturn in the US economy would have a direct impact on visitors travelling from the States and therefore would impact on the Bermuda economy.

He said: "Generally the common consensus has been that if the US economy sneezes, the Bermuda economy catches a cold."

He said that Bermuda had already seen the tourism numbers for the first half of this year go down some 15 percent though June, with 13 percent of that on the air travel side he said was according to the latest Government figures.

He added: "And it looks like this is going to be the worst in 20, possibly 30 years for tourism. Now what I think about the timing of this, and the numbers so far, is that we are talking about the first six months, and I think the general consensus among economists has been that the US economy has been effectively kept afloat in the first half of the year by consumer spending which is really to some degree I think reflected in our numbers.

"The worrying thing is that consumer spending, which I think accounts for two-thirds of the US economy has essentially started to slow, you've seen it in the press as well, there are a number of warning signs from July and August that consumer spending is starting to weaken appreciably and it is that that we should be particularly concerned about in Bermuda.

"The consumer spending is not just cars and purchases at the retail level but also things like travel. So the sense that I have is that we should be very very concerned if US consumer spending starts to deteriorate even further.

"And I think some of the warning signs that are already appearing is that consumer confidence measures which appear on a monthly basis deteriorate appreciably in August (in the US). They were down in July, but deteriorated considerably in August.

"There has also been a relentless series of layoffs of jobs across a lot of the US industrial sector as well and clearly the stock market has been going through even further drops for the last couple of weeks. The NASDAQ is down some 50 percent from where it was last September. So you have a whole series of things that could have even more impact on consumer spending in the US.

"I think we really should be prepared, and Mr. Cox should be preparing us for a pretty cold winter, particularly in the hospitality side. My sense is that a lot of hoteliers have already written off this year."

Dr. Gibbons' comments come in the wake of a statement made by Mr. Cox last week when he said the Island has not so far been hit by the world economic slow down and was in fact going through a period of moderate growth.

Speaking to The Royal Gazette, Mr. Cox stressed the economy was not slipping after poor retail sales figures were reported for three months running, stating that besides tourist spending other sectors of the economy such as finance, insurance and e-commerce were doing very well.

"We seem to be doing pretty good," said Mr. Cox last week. "When you asked about the economic conditions here in Bermuda we seem to be doing well, and are in as good a curve as we anticipated."

He said that growth, which stood at 2.9 percent in 2000, was projected by the Government at 2.7 percent during the last budget as the growth for 2001. He said: "We are still on target from the figures we have. But we don't have all the figures."

Mr. Cox's comments followed figures released last month by the Government which show that the Retail Sales Index, a key economic indicator, was down by 6.1 percent in June.

The news was seen by the retail sector as part of tightening of consumer belts as a global slowdown was expected to hit Bermuda.