Finance Minister Paula Cox admitted yesterday that Bermuda's Gross Domestic Product for 2009 could fall by as much as 2.5 percent — a revision of her earlier estimate of between one and 1.5 percent.

The Deputy Premier told a press conference that the 2.5 percent figure was based on data obtained during the 2009 Labour Force Survey, which painted a "sobering picture" of the state of the Island's economy last year.

A country's GDP represents its total output of goods and services — and negative growth is one of the factors used to determine the state of the economy and the extent of a recession.

The newly released labour survey gives an official unemployment rate for last year of 4.5 percent — with Premier Ewart Brown saying yesterday that there were 711, or about two percent, fewer jobs filled in 2009 than in 2008. Ms Cox said: "I would state that the real toll on the economy is evidenced by the labour fallout, with the levels of unemployment and also the hesitance of consumers to dip their toes back in the waters re: spending.

"While economists state that the near term looks promising, the longer-term economic outlook is cautious. The economy is at a critical juncture and policies that encourage entrepreneurship, investment and free market activity are to be encouraged."

The Minister said the US economy was showing signs of improvement after the "deep" recession of 2007 to 2009. But she added: "Serious problems remain in the US economy. Double-digit unemployment is still problematic and is a wild card.

"In the US, further restraints on the economy as we go forward could be higher interest rates, tax increases and some tightening in the regulatory environment. "What we want as stakeholders in the Bermuda economy is probably an economy that is not too hot, not too cold, but just right. We are not there yet but it is starting to look less like a mirage and more likely that we can get to a better place during the course of this next year."

Ms Cox said the other G7 countries — the UK, Canada, France, Italy, Germany and Japan — were projecting positive growth in 2010. "If the economic recoveries for the G7 countries are sustained, that should bode well for Bermuda in the latter half of 2010," she added. "We are a resilient people. Bermuda's workers are skilled, talented and committed. We have shrewd and capable leaders in local and international business. Working together we will emerge from the recession."

Chamber of Commerce president Stephen Todd said last night that Bermuda would likely have a much slower recovery than the G7 countries. "We will see a slow return hopefully," he said.