Minister optimistic about 2021 recovery
(CNS): Finance Minister Roy McTaggart has predicted that the Cayman Islands’ economy will grow by 6.4% next year after the expected 7.2% decline in 2020, creating a v-shaped recovery. Speaking at the Chamber of Commerce 2020 Economic Forum on Friday, he said the growth estimates for 2021 were based on measures implemented by government to contain the spread of the COVID-19 virus, increase disposable income and boost activity, but he admitted that there were already signs that these predictions would be inaccurate.
Although the borders will remain closed until at least October and cruise ships are barred until the beginning of next year and possibly beyond, and despite a significant decline in the population, a drop in international demand for services, a global economic downturn and a predicted recession in the US, the minister appeared confident that the measures put in place will see the Cayman economy rising again by the start of next year.
“Without these measures, the projections presented today would be bleaker, and we need not look far across the sea to appreciate what could have been,” the minister told the online audience at the virtual event.
However, during a Q&A session following his speech, the minister admitted that the figures had been based on the reopening of the borders on 1 September and the return of cruise tourism this year.
He also acknowledged that the contraction of US economy was also likely to be far worse than the 8% predicted by the International Monetary Fund, given that it contracted by 32.9% in the quarter ending 30 June, and this was before the recent spike in COVD-19 cases across many US states and further lockdown measures.
Despite accepting that these things would have an effect, McTaggart did not give a revised forecast for the hugely optimistic recovery predictions.
“These developments have the potential to stifle our recovery further if the trend persists and the US enters another extended lockdown period,” the minister acknowledged, but suggested that actions by the Cayman government during the crisis “have left us with a solid foundation on which to chart our future”.
He said the regulatory framework had reduced the potential fallout for the financial sector and the work to contain the spread of the virus and “support the basic needs of our people” had left Cayman in a largely virus free state “with no significant healthcare” problems.
But no matter how rosy the recovery forecast, Cayman is in for a rough ride. The finance ministry is forecasting a decline in the hospitality sector’s economic fortunes of almost 75%. However, the minister predicted that everything will turn around in 2021 with the reopening of the borders to tourists, creating a sharp increase that will be critically important to Cayman’s overall economic recovery.
“The reopening and subsequent rebuilding of this segment of our economy is a very crucial component of our recovery,” he stated.
But while he and Tourism Minister Moses Kirkconnell remain optimistic, representatives from the sector who joined a panel discussion following the address by Kirkconnell on Friday were less optimistic, recognising that the return of visitors is dependent on numerous variables, not all of which can be controlled by the Cayman Islands.
Despite the steep v-shaped recovery in McTaggart’s economic predictions, unemployment predictions are bleak for 2021 as well as this year, even with a drop in the expatriate population. Jobless figures are expected to rise significantly this year to almost 7%, according to the finance ministry, which says the rate in 2021 is expected to remain above 5%.
McTaggart said the success in eliminating COVID-19 had enabled a good recovery of the domestic economy, but with the exit of thousands of people since March, the loss of the resulting spend is significant, given Cayman’s dependence on consumption tax to oil the cogs of the economy. Nevertheless, McTaggart indicated that government is keen to ensure that local people are employed before work permits are granted.
“But as businesses are re-emerging from the shutdown and start to rebuild, the government is insisting that the re-employment of Caymanians must come first,” he said. “This will help move unemployed Caymanians back into jobs and facilitate the circulation of funds locally. We hope that the local business community will also see the value in this and support our administration’s effort to ensure the employment of our citizens and residents.”
However, in his address opening the online conference, Chamber President Woody Foster stressed the need for government to ensure the smooth approval of work permits to help rebuild the economy until local workers are retooled and retrained to take up the jobs. He said Cayman was in need of “an effective workforce” and urged government to ensure that WORC has the resources it needs to facilitate the return of expat workers.
McTaggart said that, given the situation, government would be looking for savings in its own expenditure in some areas, but it must spend money to keep the economy growing. Therefore, it will not be cutting public sector pay and will press ahead with capital projects to keep people working and provide the infrastructure that is still needed.
“The projects must continue,” he said. “We can’t abandon them now.” He maintained that it was important for government to stimulate the economy and get people to get back to work.
See the minister’s full presentation and the unaudited accounts for the first six months of 2019 in the CNS Library.
Re: Agriculture and farming in Cayman is possible
Google: VESAN, the first and only indoor, vertical farm in the Caribbean (Aruba).
Don’t you also forget that an army of Cayman officials visited 67th Denbigh Agricultural, Industrial and Food Show in Jamaica.
“Agriculture Minister Juliana O’Connor-Connolly, Premier Alden McLaughlin and Speaker McKeeva Bush are all in Clarendon, Jamaica, this ]6/8/19] week attending the 67th Denbigh Agricultural, Industrial and Food Show.”
“The Cayman delegation includes a number of civil servants from various ministries and departments relating to agriculture and trade, as well as representatives from the Cayman Islands Agriculture Society (CIAS). ”
“This is important as we continue to not only expand our own locally-grown agriculture products but also seek other sources to help diversify Cayman’s access to food supplies,” the premier added.”
“The visiting delegation has a full agenda, officials claimed, including looking at Jamaican farming systems, such as plant hydroponics and livestock farming, and how their agriculture practice and farming activities meet international environmental and food safety standards.”
““We must continue to be active and intentional in our strategies towards implementing agricultural best practices and understanding how it plays a crucial role in the life of our economic system..said Minister O’Connor-Connolly.”
The recovery will depend on what is happening in the world. The USA especially.
Seems like it’s easier to spin when you’re dancing on thin ice?
Then I would have to be come an inconsiderate, rude, gouging a-hole.
CNS this was supposed to be in response to :)17/08/2020 at 4:42 pm
CNS: Sorry, this is a glitch that happens occasionally and as far as I can make out, randomly.
Interesting that CIG never mentions the “ elephant in the room “ – the USA . With Coronavirus still rampant there, how could we possibly monitor US tourists, or indeed anybody flying to Cayman through Miami, Houston etc. to avoid the risk of importing the pandemic back to the island.
Take out major US tourist business and it could be a very bleak year or two.
Moses & Roy just don’t understand that U.S. residents don’t need to travel ,even when borders do open & the virus risk is mitigated. You need to go back to the post 9/11 time frame to see just how a major event can totally shrink a tourism economy & travel. Indicators are currently at 2024 to get back to a small fraction of the pre- Covid existence that tourism & travel was at. There is a very long road ahead for the tourism industry & economy in these islands.
so roy is either lying or does not understand basic economics…..which is it?
the possible slow trickle return of some tourists will do nothing to offset the economic damage that this has done to the local and international economy.
he 08 recession will look like a walk in the park compared to what cayman will go through in the coming years.
another desperate flip-flop from roy.
the only news here is that their previous overly optimistic assesment is way out of line and they have no new current forecast.
he got caught with his pants down the other day about taxations….that slip tellls you everything you need to know about the state of economies finances.
in the absence of any credible economic plan…chamber should be petitioning the governor for expert economic help from the uk.
Its confirned. Half the MLAs are mentally unfit and the other half are bipolar. No consistency. No sense. No plan.
😂🤣👍
Thank you doctor! So what is the treatment?
Roy, what are you going to do about foreclosures on people’s homes during Covid? People have lost their business, their job, and WORC is not WORKING.
What are you doing to keep people from losing their homes in the next 90 days?
In the next 90 days property prices are going to start to fall on Grand Cayman.
Never a better time to buy.
With what money? The only homes at drop down prices will be the forclusred homes that local banks are giving to real estate companies to sell off.
No one is ready for the conversation about banks devaluing properties with paid valuators so they can lower the risk on mortgages.
You lose your home and then it’s devalued and listed for 3 times the amount?!
WORC? Now there”s a sad state of affairs, The poor unemployed Caymanians cannot even get on the site to register themselves.Not to mention trying to phone someone for assistance. The phone is never answered. It is the biggest stress the poor business man has ever gone through. It takes weeks just trying to get started on this of Alden’s brain child. For the love of God MLAs, talk to these people to really find out what they are all going thru. WORC is a joke and a real s–t show.Check it out yourself, if you have doubts.
Did his Magic 8 Ball tell him this?
Since you have a problem with taxi drivers and so concern about how much they made then you should take your ass out there and run taxi too, every body is doing it, what you think?
Just curious….
There will be NO “Economic Recovery”.
This is just stalling tactics.
The economy is already decimated and as each day goes by, the carnage is worse.
Ultimately, the middle class will be eliminated.
This was perfectly executed worldwide. Odd that?
One press report says might have to implement taxes, another says things are looking good? Which is it?
On another note:: what is the government saying about the Fidelity fiasco? According to marlroad the pension business was sold from last year? I have been retired since 2015. My pension fund is with Fidelity and have never been appraised of this sale.
How does he square his optimism with the economically suicidal lunacy coming from his government colleagues?
Same guy who effectively said “there’s cash in the account…the government pension is in surplus!”
Woody’s recover plan seem based on work permit revenues….how’s that economic focus for the last 7 years worked out for us? A few month’s of CIG stripping and surpluses are already gone and we certainly aren’t employed…Aldart’s plans have never been beyond his next paycheck.
What Cayman needs is for Govt. to go back to work. Working from home is not working out for those businesses that rely on interaction with Govt. Namely Planning, Lands & Survey and the Post Office.
Come-on Woody don’t pretend none of the expats you hired needed to be trained. How about hiring and training your own people!
he has tried that….
ask him or any other business owner to be honest about their experience
Why do you all think Woody has been trying so hard to improve Education, helping with LIFE and Education Council? To help Caymanians.
Keep trying and don’t join the haters due to a few bad experiences….ask ALT about hiring expats…he’s still going to court about one.
WORC is such a joke…they don’t even try to pretend they are there for Caymanians. Hey Roy shouldn’t young Caymanians be given the same opportunity in their own country that you were given?
Nah, can’t be bothered now. Alden says give permits so we give permits. Much easier than ever training people.
awwww..the accountant is playing economist….never underestimate that power of denial.
This government looks out for work permit holders and expats. They do not care about the struggles of the average Caymanian that is living hand to mouth. Hundreds of millions have been given to wealthy developers in secret deals that they refuse to share with the public which is scandalous as they are giving away millions in government revenues. Cayman is in for a rocky road despite the positive projections for growth which is proof that they believe in magic more than credible data.
by guaranteeing PR and ultimately Status..government has made a new and better breed of Caymanian.
2.04 you are not including Mac’s mass status grants in that statement I hope.
Under Alden’s liberal “to hell with Caymanians’ futures” policies they would have all gotten PR and status anyway.
True that. Jerk chicken became the national dish, and dancehall the rhythmic vibe. Hell, we don’t even have to drive by the rules anymore.
You and your kind need to go back from wherever you came from. You lack respect for the things Caymanian and all Caymanians you found here. Nothing worse than an economic migrant with a poor attitude and bigoted views of locals.
vee are za future!!
roy has his head in the sand.
sad because he did come across recently as one of the more sensible ones.
the fact that he is not even considering redcuing cig expenditure tells you everything you need to know.
time for direct rule.
Second to last paragraph says “looking for savings in its own expenditure”. That is reducing cig recurrent expenditure.
yeah sure….and tell me how that went in the last recession?
During the Cruise Port fiasco, the CIG put out information that claimed Tourism was 25-30% of GDP in the Cayman Islands.
https://supportourtourism.com/info-brochure/
How on God’s green earth do you now reconcile this with the initially predicted 7.2% drop in GDP for 2020. We have lost 3 quarters of the year’s tourism receipts (staycations are a minor offset). Plus we all stayed inside for a number of weeks which reduced economic activity, we are down a significant amount of the population etc. etc.
The Minister and the CIG have no real idea of what the impact is and no real plan to sort things out. Which is why “he admitted that there were already signs that these predictions would be inaccurate.”
Why don’t we try to get some “accurate” modelling done and use that to guide the decision making. Pulling numbers out of your backside and then saying well there are already signs these are not right does not help anyone. How could you have ever thought we would only be down 7.2% for the year?
It is 4%
Look at the chart in this articlehttps://caymannewsservice.com/2019/05/government-coffers-overflowing/
It s 3%
It doesn’t count though the money that were flowing directly into taxi drivers pockets. I wonder how much were they making per day.
Great news – 4 more years!
It would help a whole lot if they extended the pension withdrawal until at least when the borders re-open. Myself and others included, have not touched the pension hoping for the best, but we still have September and likely October to see the true economic position. CNS maybe this a question you could kindly ask if and when there is a next press briefing
Hold off if you can…Government seems to be allowing some pretty creative accounting by pension administrators that neither CIMA (as regulator to the licensed administrators) nor the DLP (authorizers of the providers) want to talk about.
Roy, I understand the consumption point. I am not sure everyone else does. Could you please ask the Governor why his office continues to refuse foreign property owners, who are willing to quarantine (and pay for it) places on the air bridge flights?
Keep your germs where you are!
You missed the “willing to quarantine” part.
no I didn’t…I’m thinking why take the chance? We need to think of health of our own people….which you obviously don’t value.
Ummm, quarantine prevents the introduction of the virus…
In August 2020 quarantine works perfectly well in homes. Perhaps not innMarch 2020, for some, and no one died. But the world has drastically changed since then. People are quite aware there is a pandemic that must be respected.
Irrelevant. People are willing to pay for and quarantine in government facilities. Why are they not being allowed to?
They still have no definitive evidence on limit of time a carrier can have, length of time it can live on different surfaces, distance it can travel airborne….yes quarantine helps minimize the spread but it is by no way a certainty.
It’s not that we don’t care. We are “our own people”. It’s that you don’t understand statistics. Please explain why, despite our severe shut down, less persons on island, almost no rental cars, we have two road deaths. How is this possible? The answer, in part, is the irrational and extreme lock down measures we have taken, which leads to increased stress (at least for those who need to work to feed their families). So I ask you, deep down, do YOU value our own people? Or it is your pampered self that you really value?