Economy grows by 3%, passing predictions
Marco Archer, Minister of Finance & Economic Development
(CNS): Cayman Islands Government statistics released Friday indicate that the local economy grew by around 3% in the first six months of 2016, surpassing predictions and reflecting the best growth rate in the country since before the economic crisis. The forecast GDP growth for 2016 has now been adjusted from the expected 2.1% forecast by the finance minister during the budget to 3% because of the improved performance in the first part of the year. The government purse is also fuller than expected as the stronger economy has boosted revenue by 9.7%.
The latest numbers from the Economics and Statistics Office suggest that the CIG now expects to end the fiscal year with a surplus of $127.5 million, 10.8% higher than the CI$115.1 million the administration achieved last year. The finance ministry has also been getting on top of the government’s debt, which at the end of June was down 3.7% from last year to CI$501.3 million.
“I am pleased to note that growth in the first half of 2016 improved on the 1.3% growth for the same period in 2015,” Finance and Economic Development Minister Marco Archer said following the release of the figures. “It also exceeds the initial GDP forecast for the year of 2.1%, and is the highest growth rate since 2007.”
The main boost to the economy, however, may be bad news for the environment as it is based on a growth in construction, quarrying and consumption. The semi-annual growth was due in large part to an 11.4% growth in construction, while wholesale and retail trade grew by 7.6%.
Growth in the financial services sector, which still accounts for the bulk of Cayman’s earnings, was considerably more modest. Financing and insurance services grew by 3.6%, which the ESO said down to the domestic lending activity of commercial banks rather than the offshore industry. While visitor numbers are still growing, the hotel and restaurant sector declined by just over 1%.
The GDP estimate for 2015, based on data collected from local businesses, shows that the local economy was where the growth was concentrated.
“The 2.8% growth exceeded the 2% advance estimate for the year based on early indicators,” Archer said. “Moreover, it was broad-based as all sectors in the economy turned in positive growth rates. This augurs well for the increased diversification of our economic base.”
Despite the growth in 2015, the country’s GDP per capita in current prices declined by 0.4% to CI$48,167 as the 2.8% growth in GDP was outstripped by the 3.6% increase in the estimated mid-year population. The growth is also having an impact on inflation. Those who are facing wage stagnation, or even in some cases declining, salary expectations may still be feeling the pinch despite the good news on the growth front.
The average price of goods and services increased in the third quarter of 2016 by another half a percentage point compared to the same period in 2015. This is the first time that the CPI increased after six consecutive quarters of decline, due mainly to the impact of oil price reductions. While lower oil prices have helped temper the price increases elsewhere, the real increase in the cost of living is beginning to be felt.
See the ESO reports in the CNS Library or visit www.eso.ky for more information
I would agree with the numbers for the first two quarters of 2016, but the last two quarters really tanked in terms of cruiseship revenue. December was really slow going for ships, and season now starts a month later than in previous years, and end two weeks earlier.
Now that Pirates week is in November, road closures only make the fourth quarter numbers worse. Also quality of ships is an issue, Aida is a joke, might as well not even bother counting it, could not sell those Germans dollar bills for 50 cents. Govt. Is all patting themselves on the back, whilst doing a mediocre job at best. It is most irritating to hear them trumpet their accomplishments when they are not actually accomplishing anything.
Growth? Why are they allowing all these independent non licensed contractors to be running around yet they tax and regulated the ones who are following the rules.
this is all very good but little to do with marco or the ppm who have sat on their hands for the past 4 years. They have maintained the broad economic policies of the last ‘adminsistration’ while at the same time have benefitted from improving global conditions and the crash in oil prices.
Plus if there was no huge inward investment by DART this place would be in big trouble…..
Everybody is so tired of the PPM gloating over their fiscal economic prudence If it was so great why do they have to keep boasting about it. The people of Cayman would see and feel it. Clearly with the amount crime and certain other social factors it would indicate otherwise.
PPM stop wid this financial mumbo jumbo and bring my friggin turkey and ham nah! 1 Turkey 1 vote OTOV
Yes 5:29pm here is the response you seek while the whole island goes to $#@& under this horrific criminal situation and nightmare. All the PPM same concern with is their own financial prowess and status which serves only to benefits their UK masters. Who continually play monoply games with the ppm so call good standards because this so call 3% will be swallow up by this enormous UK led Law enforcement monster who are doing absolutely nothing but continually giving lip service. While personal and public safety is rapidly eroding away and our status as a safe destination is quickly drifting away. Which by the way directly effects one of the main pillars of our economy tourism. The reason why Cayman figures are up is because the other destinations simply have become totally unsafe from terrorism. Hows that 5:29 please stop eating that PPM turkey and drinking that ppm sugar laced Koolaid Its too sweet !
Even when the numbers speak for themselves, the fear mongers and spin doctors still try to discredit the hard work of the PROGRESSIVES (PPM). Lets hear what they have to say now…
As Winston Conolly once said, just because the sun rises and sets each day doesn’t mean the PPM made it happen!
While you may be prone to repeating asinine comments I am sure you must prefer 3% economic growth as opposed to less than 1% or unemployment at 3.9% as opposed to 10.5%? Thought so. Credit to a good government that has done a lot of good things.
Of course we do, but all of the projects that made the GDP happen were nothing to do with the ppm. Health city. CEC. Dart. Ironwood. What have the ppm got to show for four years??? Not one thing.
Even the increase in revenue is mostly due to these projects and the new director fees introduced by the last govt.
While this government takes credit for a growing surplus, all of their policies have either DECREASED revenue or INCREASED costs. Don’t take my word for it, look at their own budget speeches.
What do the ppm attribute their apparent fiscal success to? “Investor confidence”. What have they done to create “investor confidence”? Fixed immigration. Nope (made it worse). Reduced the size/cost of government? Nope (made it worse). Redeveloped George Town? LOL! Minimum wage? Hardly. Fixed education? Not in the least.
the new director fees introduced by the last govt.?? – have a look at the date of that law
The finance minister himself credited the last government in his first budget speech!!
Yawn. Regular spin tactic of the UDP/CDP/KGB and the “Not So Independents”. NEXT
Interesting that another ESO report shows that the cost of living is also increasing for the first time since 2014. Odd that because I never noticed it slowing down in the first place.
Anyway there’s a lot of material to work on in the ‘growth’ report but I’m going to stick to one area, tourism, because the ESO comments on this are nonsense.
In this report the fall in arrivals from the UK and Europe is attributed by ESO to pre-Brexit uncertainties but that is complete BS. It’s being caused by one simple factor – cost. As a friend of mine put it earlier this year, ‘The place is just too damned expensive.” What ESO seems to be ignoring is the competition from neighbouring countries in this region, particularly Cuba and more recently Costa Rica. Transatlantic tourists can get better holidays, cheaper and with less hassle elsewhere so that’s where they’re going.
Even with Egypt’s Red Sea resorts all shut down there’s been no pick up in numbers here and that’s hardly surprising when you consider that tourists from the UK can get a week all-inclusive (that includes the flights!) in Cuba or one of several other destinations in the area for not much more than then the cost of a return air ticket to Grand Cayman or one night in the Kimpson.
Dragging Brexit into this is just being silly because, in my opinion, the real reason for the decline is that over the years DoT has done everything they could to discourage the kind of tourism product that brings people in from across the Atlantic. Not one major UK or European tour operator offers holiday packages in the Cayman Islands and that’s why the numbers are falling.
I’m not familiar with the dynamics of the Canadian tourism industry but I suspect the same applies there. Arrivals in Cuba from Canadian airports have apparently increased by 50% in just over two years hitting around 1.2 million in 2015.
The kind of leveling off in tourist arrivals the report reflects has a very bad habit of rapidly turning into a slump.
Just another day in paradise. I’m so proud to be a Caymanian.
In the past year my electricity bill has dropped I purchased a new car and my employer gave me a fat bonus. I will have my Masters degree early next year.
Oh and I’m sitting on the beach with my toes in the sand licensing my new car.
Life doesn’t get any better than this.
I know mista 3:36, He a drug dealer.
Yup and the drug is called truth! It is completely legal and free. You should try it! It will even make you smart!
Yes sitting government wasters; blow your horn.
Meanwhile in Cayman’s low-income neighborhoods:
“The average price of goods and services increased in the third quarter of 2016 by another half a percentage point compared to the same period in 2015.”
Those are your voters, your Caymanian parents and children struggling to put food on their table as you pop champagne celebrating higher Gov revenue from raping poor people’s bank accounts.
Food duties higher than ever, clothes, pampers, formula, bottles – 22%, while billionaire developers get duty free everything and wealthy cruise passengers indulge to the tune of duty-free luxury items and the PPM government blow-up balloons to celebrate income from increased work-permits and again, while NAU tackles the roster of unemployed assistance-seekers. What an accomplishment to be proud of!
“While lower oil prices have helped temper the price increases elsewhere, the real increase in the cost of living is beginning to be felt.” – A grim prophecy for these islands considering the already rampant desperation of our people.
Stand-up Cayman voters and raise your glasses to your elected officials and their accomplishments.
How are food duties higher than ever when most food items and certainly staples are DUTY FREE! Stop chatting your nonsense.
Have you read the Customs Tariff Law lately?
Nope, didn’t think so.
If that is your advice you better follow it yourself – you have no clue what you are talking about. Staples are duty free
For your ease of reference the Customs Tariff Law can be found here:
file:///U:/CUSTOMS%20TARIFF%20LAW%20(2015%20REVISION).PDF
And so that you can compare how many of your “duty free staple foods” are really NOT duty free; here is a list of staple foods:
http://www.realsimple.com/food-recipes/shopping-storing/food/pantry-staples-checklist
Now go ahead and compare the Tariff Law with the staples food list and tell me how many “duty free” staples you find – so before you go “chatting nonsense” do your research bobo!
So I guess it all depends on what you consider a staple food to be – SOME may be duty free; but many others attract 22% duty while silk is 12% and pearls are 0%. So if you think people are going to eat rice and oats all day while many fruits and vegetables attract 17-22% then you are on your own.
what a huge disconnect between the government and the people. Lucille Seymour, a PPM member has a contradictory position to the “Governments Good News”
http://cayman27.ky/2016/12/what-issues-matter-to-george-town-constituents/
Oh no not her again. How desperate are you for candidates?
Thank you Dart for being one of the few committed investors in Cayman….thank you Marco and Alden for reporting great numbers where your only contribution was really letting employers know they need not worry about the immigration law beyond paying the work permit fee. How can you boys be so oblivious to the pain and long term damage you are causing Caymanians.
Do you think they care?
Can you stop your political nonsense and give in to the truth that this is the best government we have had in many terms – maybe ever!
If the economy is growing then both Caymanians and expatriates will get jobs so the work permit numbers will go up because the businesses need more people than there are skilled Caymanians available to fill them. In any even the current work permit numbers at not yet a record so they have been higher in the past!
What nonsense. What did you get, a turkey?
Low level jobs even for very qualified caymanians…thank you for letting us dig your ditches.