The growth of the Bermuda economy is set to contract by 1.5 percent next year, according to the Government's leading financial advisor.

Yesterday Dr. Andrew Brimmer, pictured right, the principal policy advisor at the Ministry of Finance, told an audience at the Bermuda International Business Association annual general meeting luncheon, that the Government expects the Gross Domestic Product for the Island to contract by 0.4 percent in 2001, and to fall by 1.5 percent in 2002.

Dr. Brimmer said: “Taking the Bermuda economy as a whole, real GDP (GDP with inflation factored in) is expected to contract by 1.5 percent in 2002. This decline would follow an expected decrease of 0.4 percent in the current year. So, over the two years combined, total output, or real GDP, may be reduced by about two percent.”

Dr. Brimmer also pointed to the predicted fall of the GDP in the United States, stating that following the attacks on the World Trade Center there was a downward revision of the real GDP rate for 2001 to 0.8 percent.

He added: “The estimate was presented with considerable caution, since there was a high probability that the final figures could be lower.”

But he said that current forecasts for real GDP in the US are for an increase in the first quarter of 2002 at a 0.5 percent rate, with real growth resuming in the second quarter of 2002 where it is expected to be at 2.2 and coming in at 3.9 percent in the final quarter of next year.

He said that a decision to be made by US Congress to approve a stimulus programme was crucial for the quick recovery of the US economy and therefore the Bermuda economy.

And he said the projection he and the Ministry of Finance made included a recovery based on some kind of stimulus programme set up by the US.

Donald Scott, Financial Secretary, who also attended the meeting with Finance Minister Eugene Cox, said: “We still don't know whether or not the economic stimulus package that is being considered in the US Congress, whether a resolution will be arrived at.