Government said it was not surprised by a lack of confidence in the economy borne out by figures from a survey conducted by Research.bm on behalf of this newspaper.

The independent study of 400 Bermuda residents aged 18 or above during the third quarter showed that 22 percent of registered voters were confident in the direction of the economy — down five points from the previous quarter.

Furthermore, 38 percent of residents, mainly white and elderly, were not confident in the direction that the Island's economy was heading — the same as last quarter.

The findings also revealed that black residents were more likely to be confident in the economy's future direction.

But Finance Minister Paula Cox remained upbeat about the situation, believing that the country will pull out of the recession next year.

Ms Cox said the dip in confidence stemmed back to the start of the global economic downturn, triggered by the sub-prime losses by financial institutions in the US, which has had a knock-on effect on economies across the world for almost two years, not least Bermuda.

She said the recession accelerated sharply due to the collapse of Lehman Brothers and American International Group in September 2008 and despite the efforts by the US Federal Reserve and Treasury, America's capital markets were pushed to the brink of collapse. Lending has dried up, leading to a big drop in output and employment in the US.

But Ms Cox saw some reasons for optimism, with signs that the crisis is beginning to ease in a few of the world's economies, including some 'green shoots' in the US. However, she added that Islanders still had cause for concern over the state of their own economy. "The survey results are not unexpected," she said. "Why do I say that?

"Bermuda has been experiencing the effects of the global downturn since the later part of 2008.

"Although the country has been very resilient, there have been negative impacts on the economy. This naturally would cause Bermuda residents to become concerned and a credible poll with a proper sampling would discern that — it is an obvious reaction.

"We can be a very cautious people and it is better to have a sobering dose of realism than to be wildly optimistic."

Ms Cox said it was anticipated that the weak global economy would continue to dampen leisure travel to Bermuda for the foreseeable future, pointing to the fact that visitor arrivals were down eight percent in the second quarter and have declined by 11.3 percent for the first six months of this year, with arrival figures predicted to fall for the rest of 2009. However, she reckons a recovery is not far away. "As we look to the future, there is an emerging consensus that major economies will return to positive growth in 2010, including the United States, Canada and the UK, France and Germany," she said.

"If this pans out, it will fit with the Ministry's anticipation of Bermuda's economy also emerging from recession in 2010 as stated at the time of the 2009-2010 national budget."