HAMILTON, Bermuda (CMC):

Finance Minister Paula Cox says Bermuda is suffering scars from the global recession which will take a long time to heal.

"Since the financial collapse of major banking institutions in the summer of 2008, governments around the world have seen revenues shrink while at the same time they have sought to provide stimulus to their economies to mitigate the ravages of the deep global recession.

"The global economy is an unfolding narrative as opposed to a finite position. The economy is not a static instrument and there have had to be assumptions made and some modelling done, but the economic picture has been constantly evolving. Assumptions have had to be reassessed in light of the changing and evolving circumstances," she said in a statement.

Her remarks come amidst media reports that civil servants have been told to cut spending by 20 per cent, and reduce travel costs and overtime to a bare minimum.

The Royal Gazette newspaper quoting sources said that civil servants have also been informed that 500 civil service vacancies will not be filled as island continues to reel from the global economic downturn.

The clampdown follows the release of new figures that showed government suffered a shortfall of more than US$100 million in its finances in the last fiscal year.

Government revealed total expenditure for 2008/09 was US$1.194 billion, US$$77 million more than it had estimated in the budget. Of the extra spending, US$45 million went on capital outlays and US$32 million on current programme expenditure.

Projects outlined in the 2008/09 estimates included the new cruise pier in Dockyard and Port Royal golf course, both of which saw their costs increased significantly.

Revenues

Meanwhile, revenues were US$953 million, US$32 million less than estimated, as a result of shortfalls in customs duty, passenger taxes and stamp duty.

Government had estimated it would have to borrow US$111 million.

The figures, released by Attorney General Kim Wilson in response to parliamentary questions from opposition United Bermuda Party senator Jeanne Atherden, also showed government overestimated its revenues again for the first quarter of 2009/10, by US$20 million.