Bermuda?s economy was not been devastated by Hurricane Fabian ? and is still on track with moderate growth expected for the next year, said Finance Minister Eugene Cox.

Despite the huge cost of Hurricane Fabian, a forecast drop in visitor numbers and therefore visitor spending and inflation expected to stay at three percent until the end of the fiscal year, Mr. Cox said that real gross domestic product would increase by between one and 1.5 percent ? in line with earlier Government predictions.

?Bermuda is standing up to the economic and financial challenges left by Hurricane Fabian,? said Mr. Cox. ?With continued strength in the construction and international business sectors, Government anticipates the economy will continue to experience sustained, albeit modest real growth in 2003-4.?

In his mid-year review of the economy delivered at the House of Assembly on Friday, Mr. Cox said that the damage to infrastructure, buildings, and equipment by Hurricane Fabian was ?substantial? and was estimated at $46 million in total.

But $30 million of this would be covered by insurance, leaving the Government out of pocket by $16 million, and this figure could be met within the Government ?s budget.

And he revealed new visitor spending figures for the first nine months of the year which showed that the ?expenditure from air visitors declined quite sharply? after the hurricane ? and predicted that there would be fewer visitors in the third and fourth quarters of the year.

But Mr. Cox pointed to the continued expansion of the international business, especially the insurance and reinsurance sector, strong growth in the construction industry and consumer price inflation of 2.2 to 2.5 percent as boosters to the economy.

These would balance out the slower than expected economic recovery of the US, their loss of three million jobs over the past three years and an expected cut back from predictions of growth of 6.6 percent for GDP in the Sates.

Mr. Cox also said that the economic performance of other G7 nations was expected to be modest, with rates of growth ranging form zero to 2.3 percent.

?The general picture that emerges from this scan of the world?s major economies is that the robust and sustained economic growth is yet to return,? he said.

The overall rise in visitor arrivals, up 1.9 percent, meant that before Fabian hit, in the hospitality sector was a potential for a good year for tourism in 2003, but it was ?wiped out by Hurricane Fabian during those 12 fateful hours on September 5, 2003.?

Mr. Cox revealed that, as expected, visiMr. Cox revealed that, as expected, visitor expenditure ?declined quite sharply? in the wake of Fabian.

?As a consequence total visitor expenditure for the first nine months of the year is estimated to have fallen by 2.9 percent to approximately $303 million compared with $312 million for the same period,? he said.

?Fabian?s strike in September marked a turning point as total visitor expenditures to the end of August 2003 had been ahead of 2002.?

Mr. Cox said that Bermuda?s balance of payments are expected to come under pressure in the third and fourth quarters as a result of the hurricane and said he expected a higher than expected imports of building materials and supplies, higher than usual imports of furniture and equipment and fewer visitors and therefore lower visitor expenditure.

But he said that despite the effects of the hurricane on the economy, Government was still expected to bring in $650 million in taxes as the drop off in tourism will be balanced out by customs duty and payroll tax for the construction sectors.