The Treasury Minister is warning next year's budget is likely to be the most difficult for two decades.
Allan Bell made the comment after yesterday's debate on the Isle of Man depositors' compensation scheme.
Members approved enhanced regulations, under which ?150 million of taxpayers' money is being set aside to provide assurances for local and international investors.
If needed, individuals would have protection of up to ?50,000 and charities and businesses up to twenty thousand.
Mr Bell (pictured) says as the economy slows there will be a dramatic fall in government revenues, making it difficult to satisfy everyone's expectations when it comes to budget time. He told Manx Radio:
"It will be a very difficult year next year generally, I believe. The Manx economy is still strong, it's still growing, house prices are strong, unemployment is still very low.
"But it's inevitable that we are going to be affected by the back-wash of what's happening in the UK. There are strong indications now that the UK have gone into recession.
"I'm hopeful that will not happen in the Isle of Man, but undoubtedly our level of growth is going to reduce and there is a likelihood unemployment will creep up as the year goes on.
"I'm going to have to ask for some substantially increased deficiency within the government departments next year, to balance the books."
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