Shadow Finance Minister Bob Richards last night attacked Government for failing to anticipate problems with the economy.

Mr. Richards was speaking after Finance Minister Paula Cox reduced her 2008 growth forecast in the light of increasing inflation, falling visitor spending and a global economic slowdown.

He said Government should have cut its cloth according to its resources in its $1 billion February Budget.

Responding to the Finance Ministry's prediction that GDP growth would be two to 2.5 percent this year — as opposed to the previous forecast of 2.5 to three percent — Mr. Richards said: "They are still behind the curve. They now are just acknowledging what's been obvious to everyone.

"We should have seen a different type of Budget — a Budget that was more considered. They cut their cloth according to non-realistic expectations.

"A lot of Government's receipts are based on tourist numbers. A lot of their assumptions were wrong."

This year's Budget included plans for free tuition at Bermuda College, free day care, 500 interest free down payments for first time Bermudian homeowners and capital spending on housing initiatives, seniors' facilities, an urgent care centre, improvements to the airport and cruise docks, the redevelopment of Port Royal Golf Course, Morgan's Point and a coordinated school maintenance programme.

Mr. Richards reacted by saying Government was spending more quickly than the economy was growing, and warned the recession in the US could harm Bermuda.

In her Budget statement, Ms Cox said the Island's economy was boosted by its expanding international business sector but warned growth was likely to slow down as a result of global economic factors.

For the full story on Ms Cox's revised forecast, see Business.