Bermuda's economy is beginning to blossom after the lean recession years -- although work still needs to be done to improve employment, the Finance Minister believes.

Dr. Grant Gibbons was speaking after the Bermuda Monetary Authority released its latest statistics on the state of the Island's economy.

BMA figures on the health of the Island's banks and Bermuda's balance of payments for the first three months of this year appear to reveal nothing startling about the economy and paint a healthy picture.

The statistics show that surplus deposits -- how much the banks have in hand to lend -- are down to $269 million from $359 million at the end of 1995.

In addition, the amount of capital going out of Bermuda soared to $30 million in the first three months of this year compared to just $3 million for the same time last year. The BMA said this was due to increased overseas investment from Bermuda.

The number of exempted companies registering in Bermuda is also marginally up compared to the first three months of 1995.

So far this year, 195 exempted companies have had their applications to set up shop in Bermuda approved, one more than the same time last year.

And the balance of payments deficit for the first three months of 1996 was $1 million less than the same time last year when it was $40 million.

One statistic casts a slight cloud over the report as visitor spending for last year has been revised down from $487 million to $480 million.

Charles Vaughan-Johnson, president of the Bank of Bermuda, said he and his colleagues had discussed the drop in banking surplus, but could find no definitive answer.

"The implication could be that the banks have lent more,'' said Mr.

Vaughan-Johnson. "It could be an increase in loans or it could be people drawing more on their deposits and investing outside Bermuda.

"However, income on the investments comes back to Bermuda in the form of returns and very often that money is being spent on the Island and is an extra source of revenue.

"I do not think the surplus figure indicates any lack of confidence in the Bermuda economy.'' Dr. Gibbons said the balance of payment deficit was seasonal and always improved as tourist numbers increased. The amount, he added, was in line with other years.

"I think that as I said in the House of Assembly at the end of the last session the economy is in good shape,'' he said. "The companies incorporated in Bermuda are up which is quite encouraging and the preliminary numbers for tourism are reasonably positive which is also encouraging.

"Clearly there is a certain amount of effort needed from an employment view, but that is improving as well,'' said Dr. Gibbons.