Inflation one of several threats on horizon
(CNS): In his address to Parliament on Wednesday on the PACT Government’s first strategic policy statement, Finance Minister Chris Saunders painted a relatively optimistic picture of figures for public finances and the economic recovery from the COVID-19 fallout. But he also noted some threats on the horizon, not least the problem of inflation. Caymanians are well aware of rapidly rising prices and the expectation that things are going to get worse.
In the figures presented to Parliament, government accountants are predicting a consumer price index increase of 2.1% this year, 1.9% in 2022, 2% in 2023 and 2.6% in 2024, based on forecasts from the United States. However, shortages could see inflation spike further.
Given that the smoothed out average rate of inflation disguises the day-to-day rising prices that ordinary people endure, things could prove very challenging for most workers, who have already suffered a persistent period of increases in the cost of living without seeing an increase in their earnings.
Global inflation was running at 3.2% last year, despite the contraction of the economy due to the COVID-19 pandemic. But here in the Caribbean, inflation was running at 7.7% because of high levels in Haiti and Suriname, and the regional rate is expected accelerate over the next two years, which could easily impact the local predictions.
The SPS also noted other risks that could impact inflation, including vaccination programmes worldwide, the pace of recovery in the US and emerging short-term mismatches in the labour market. “If these expectations remain persistent, they are likely to add additional inflationary pressures over the medium term to the Cayman Islands economy,” officials have warned.
During 2020, inflationary pressures came mainly from food and drink, which rose by more than 5%, which reflected imported price hikes driven by a general increase in all food indices on the international market. This year, constrained global demand over the medium term is expected to support low price levels in the international market, but in reality prices continue to rise here at home across the board.
Crude oil prices are also expected to rise by 21.2% in 2021, though experts believe, despite the reality in the stores, that other prices will not increase much for the rest of this year.
However, local officials believe that Cayman will be importing more inflation in the medium term into 2022, pushing up the cost of living likely beyond predictions.
With government also still depending on construction and development to keep the economy buoyant as it steers Cayman through the ongoing pandemic, it has already raised concerns about the significant increase in the cost of construction materials. Premier Wayne Panton stated at the recent Chamber of Commerce Legislative Luncheon that the government would have to find ways to address that issue.
In addition to inflation, the SPA identifies the continued uncertainty about how the pandemic will play out, including the problems relating to the vaccination rate both here and around the world. It also notes the potential threats to the financial services sector, which remains the major economic platform for the economy and funds the bulk of public services.
“The financial services sector continues to face the increased risk due to changes in regulatory requirements from international regulatory and political organizations. Notably, the addition of Cayman to the FATF grey list and continued talks of the European Union adopting stricter criteria on economic substance could lead to an additional burden on the sector,” officials said.
In the SPS, government outlined plans to enhance the financial services policy functions and the regulatory services provided by the Cayman Islands Monetary Authority in response
to recent international regulatory changes. There are also plans to increase funding to keep the jurisdiction in compliance with global financial regulations and take the steps to remove Cayman from the grey list.
See the full SPS in the CNS Library.
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Category: Economy, Government Finance, Politics
Cayman will soon be priced out of the Caribbean market. most expensive everything.
Genuinely sorry for young Caymanians starting out working and trying to buy their first home.
It’s not just in Cayman, prices up world over.
I’m staying in a 4 bedroom house on the lake, watching deer walk through the yard. The house costs $250,000.00
Perfect. Cheap and deer at the same time!
There’s no deer in Cayman! And you can’t even buy a bathroom for 250k…
True dat, best we get is 3k per month, one bed studio, with green iguanas and chickens, potholes and a flooded road!
Too dear
Priced out the Caribbean market? What does that even mean? In any event I can only assume you haven’t travelled around the Caribbean much!
15 @ 6:37pm – Highest murder rate of innocent blacks by police in history!! RIP Breonna Taylor, et al!!
US police shootings of unarmed black people are down 63% since 2015. The statistics are bad enough without making up your own.
https://www.usatoday.com/story/opinion/2020/07/03/police-black-killings-homicide-rates-race-injustice-column/3235072001/
@3:49 maybe you meant the private sector. Public sector workers do not get an annual COLA and increments have been frozen for years, resulting in significant anomalies in pay scales.
For example, new workers are able to negotiate salaries and can enter the service at a higher rate than someone with previous years’ service and doing the same work.
And unlike the private sector, there’s no annual bonuses!
The truth is, the majority of workers (private and public) are feeling the pain!
@ 9:20am I work in the private sector and my company has not given a COLA since 2017. Before that it was 2014 (which really did not amount to anything either time). Trust me you all have it so good working for the Government. You get a decent salary, so much freedom, paid health and pension for you and your families but still complain?! I have to show up on time, and WORK. I actually have to earn my paycheck. The bonus is not even two weeks pay.
9.29am A trait of many civil servants is to be self-delusional. It was not long ago that you all got a whingeing increase to make up for the lack of COLA adjustments in the previous several years.This happens on a regular basis. Just like our Ministers and M.P’s Mr Manderson can give you increases whenever he feels like it.As for annual bonuses your system just creates new positions with higher salary ranges for existing staff.i.e. annual bonuses.
We should borrow 330 million dollars, that will help.
Borrow from whom? The government prints its own currency
Nice of the Deep State to warn us.
Sleepy Joe is at the wheel. We have 3 more years of this.
Go away with your nonsense.
Nonsense? Manufacturing companies in the US can’t find anyone to work because Biden pays them more to stay at home on benefits.
Meanwhile, under Trump, There was record low unemployment and the economy was thriving!
9:55 Remind us when the COVID relief handouts began, Joe was not the US President at the time, perhaps we missed it?
It’s useless trying to argue with someone who believes such bullshit so you enjoy the little fantasy land you live in.
And Cayman Airways fares have gone up 300%, price gauging at it’s worst as they have a monopoly.
Are you sure? How do you know? Sounds like BS to me.
Considering more people would like to fly off and they won’t add more flights to help with running costs. Yes.
Whatever inflation the US has, yours is going to be higher. It’s very hard to see how the government accountants came up with a price increase of only 2.1% for this year. Is there an economist in the house?
We should get food from central and South America
Doh – don’t you think that they will also have inflation?
I’m sure you don’t understand how costs work. You do realize things are cheaper in places that have weaker currency?
Yeah.. inferior quality too. But then again, everything tastes like chicken 🍗
Then eat chicken. You won’t be disappointed.
Lol. Economics fail.
Lol
No mention of fixing the dump in the SPS
I thought that was settled. (?)
And just think about what Dart is doing land-banking half the island! they should introduce an annual tax on land holdings in Grand Cayman greater that 1 acre that aren’t being used.
What do you mean by “used”? Can I keep a cow on my land and avoid your tax or do I have to concrete over it? Sounds like one of the dumbest ideas I’ve ever heard.
Yup. People love to say you should have to develop land when it’s better that we STOP developing all our land and habitats away.
Premium fuel is now over $5 a gallon.
Anything vaguely healthy and fresh is already wrinkled, disgusting and about two or three times the price in the USA.
I know it’s not pertinent here, but many house prices and rents have probably doubled in about the last 6 years. Wages haven’t kept pace with this craziness. You’re now looking at >400k for a cookie cutter 2 bed in an okay area. Tack on another 100k for a nice area. Minimum.
It’s utterly depressing.
Depressing…
Double rent is an exaggeration but it is higher for sure
5:57 – Premium fuel is only required on premium vehicles that include Mercedes Benz, BMW, Porsche, etc. If you can afford that vehicle, you can deal with the carrying costs. Go cry elsewhere! 😁
Not even needed in most of them only the high end AMG, M and GT models .
$5 gas? Meh. About average globally and half that of Europe.
The $5 gas isn’t expensive per se, but the point is that it’s expensive relative to the price of fuel here over the last few years. I don’t really care what the price is in Holland or Venezuela.
It’s the fact that basic staple food stuffs of any decent quality are ridiculously expensive that really gets on my nerves.
No one on this side of the Atlantic cares what gas costs in Europe.
US$2.49 here in southern US which equates to CI $2.49 per Imperial gallon. (If you ever wondered why the dollar exchange rate is what it is, its the same as the size difference between US and Imperial gallons. This is convenient for certain people.)
Got to love those Bidenomics!
You forgot about the Trumponomics which also printed money and devalued the dollar and sent debt skyrocketing to record highs… as did every president before them.
He didn’t close off the all the federal areas for oil exploration – price of oil is through the roof. Oil companies are loving Biden right now. Me, not so much.
Oil prices rising has nothing to do with Biden. But we know presenting facts to fake news lovers is a waste of time.
Lol, fool
Great points. I’ll take that as you don’t know what you’re talking about. Cheers.
Let me explain it to you. Biden has halted leasing of federal lands. This removes the reserves on those lands from the market. Supply is not just oil in tanks somewhere it also includes available reserves in the ground. Supplies were also restricted by blocking a large Canada/Oklahoma pipeline that literally needs only a couple of miles to be finished and in operation. Biden definitely owns the higher gas prices.
Poor old Biden. When he was Vice President he didn’t know his AC from his DC! Now he tries to do and say what he is told but doesn’t seem to remember what it was.
3:59 At least he’s not going out drunk and beating up women. The speaker of your silly little UK territory is a wig wearing woman battering drunk. I suggest you focus on fixing your own leadership before criticizing the leadership of a real nation.
The US is crashing and burning. If the republicans don’t win the next presidential election, the country will be split apart so far it will be half blue and half red. American Vet
That’s such a load of bullshit but please keep spewing stuff you have no idea about.
8:27 Did an explosion give you a brain injury or did you not serve in combat and only joined the military (if you really did) for the GI Bill? You sound like an angry person spewing garbage.
You too!
Lowest black unemployment in history
Trump era yes. Biden is an empty corpse Weekend at Bernies President but it’s important Biden stays alive because Kamala Harris is an effing moron and twit.
Thanks to the economic policies put in place by the Trump administration.
wasn’t the lowest black unemployment rate during the Slavery era?
The Dirty Don’s true goal was to emulate the era again
The slave owners were all Democrats.
And please explain to us what party the Democrats of back then are now. Because you can’t just say they were Democrats without knowing the history of the parties evolution, but thanks for trying with your gotcha comment.
Still the Democrats. Lincoln was a Republican btw.
CNS: This week’s high school homework assignment for Basic History That Everyone (At Least All Americans) Should Know: Discuss how and why the two major parties in the US have switched platforms over the last 100 years. Explain what happened to the Whig Party. Say which party Lincoln would be a member of if he was alive today, giving your reasons.
@ 10:10 am: You just won the Liar-of-the-Month” award. Congratulations!
4:25 – Trumponomics bailouts blew away the ones of the 2009 crisis. And he loved bragging about it too! Let’s also not forget how that buffoon was pressing and criticizing the federal reserve for not bringing in negative interest rates. Could you imagine how much worse inflation would be if that crybaby wannabe prez had received his negative interest rates? Please do your research before posting nonsense. Island moron!
Sorry, your claims are exactly backwards, but don’t let the facts get in the way of your rant.
2:42 – here you go….you misinformed jackass!
https://markets.businessinsider.com/news/stocks/trump-again-calls-negative-interest-rates-us-tweet-gift-fed-2020-5
But interest rates were lowered and inflation did not go up. Inflation has a mind of its own, unlike you.
Lowest black unemployment in history.
Are you really the Island Moron? If so, what island do you live on?
That would be you, 4:46pm…
4:25 – Got to love your idiotics
Price gouging is outrageous here, went to ALT when the TS was scheduled to hit and they’d up’d the price of a leaf blower by $100. You could see the original price still where the overstock was.
I know Mr T wouldn’t allow this, so who is the thief here?
But Mr. T did allow it, so you tell me!
Assumed he’s retired, maybe Mr T Jr
How are you so surprised that the man with gates made in the likeness of his last name would allow such a thing? This price gouging will probably pay for the new ALT shrubbery on the front lawn for us plebs to look at.
@ 6:39 I like sticking my head through the fence like Tiny Tim looking at the prize turkey in the window. God bless us every one!
Nice!
First of all, leaf blowers should be illegal.
Spoken like someone who has never cleaned their own yard a day in their life.
I do my yard with an electric (quieter) leaf sucker – I don’t push the leaves/dust into my neighbours yard or road for it to blow back into my yard when their gardener comes. For lots of leaves I use a rake & take them to the dump.
I agree leaf blowers should be banned.
Why should leaf blowers be illegal?
Stop casting aspersions on ALT. He didn’t kill anyone.
No but you think everyone was dead that works for him considering how hard it is to find someone to help you in that store.
Maybe he did?
cig has never been able to tackle inflation or cost of living….they only increase it with their inward loking protectionist policies.
prime example…joey hew banning uber in cayman.
3.49pm Why should they, civil servants regularly get cost of living adjustments to their salaries and their pensions are inflation proof.
I sure don’t know where you get your information but it is way off the mark.
Bitcoin fixes this. Downvote all you want but everyday you lose purchasing power from unlimited FED currency printing. The US $ is a ponzi, $27 Trillion is debt
Preach! People still don’t understand the importance of basing your currency on a hard asset with limited supply (just like every other economy before 1971 when Nixon went off the gold standard). People only think about the last 50 years and not the 10,000 years before it.
Adding Bitcoin to the country’s reserve would strengthen the Cayman dollar and fight inflation. Prices would actually go DOWN over time. Nothing but positive things will happen… no downside. Not kidding.
Insanity
Watch what happens when the dollar goes down even more and Bitcoin goes up (even more). Logic will soon take over. Dollars are limitless, Bitcoin is hard-capped at 21 million coins, forever. It’s simple math.
Inane logic. It has no intrinsic value. Just because the supply is limited means nothing; the number of crypto currencies (4000 and counting) isn’t and as a means of exchange it’s an environmental disaster. It’s a bad solution still looking for a problem.
Nothing has intrinsic value, it’s subjective.
Bitcoin is the dominating network the entire world over, owned and controlled by no company, government or person.
It’s now legal tender and the most secure computer network trusted by millions.
As for the environment, it’s majority operated using stranded energy that couldn’t be used by anything else.
As for the bad solution looking for a problem. You collect your worthless FIAT paper enforced by oil and bombs, have fun staying poor.
People don’t understand the gold standard. Yeah, we do. At least anyone with even an inkling of economics does. Do you understand that you don’t have to hold your wealth in fiat cash right? Bitcoin. LOL
Actually wouldn’t do much in the short term, the CI dollar is essentially a US dollar. Reserves of BTC would only be helpful if there was a ‘reorder’ of the global fInancial system or the CI dollar was to become unpegged from the USD.. we’re not exactly El Salvador looking to escape the banking cartels.
You might be happy exchanging your labor for pieces of worthless paper printed from nothing. But I’ll take the bitcoin, gold and silver.
Good for you. The cheer leading for BTC seems more than a little desperate though. If you don’t get paid in dollars and have a few grand in BTC that are worth half what he were a few weeks ago I’ll eat my virtual hat. There’s only one of them too so it’s worth billions. Right?
oh no!….won’t someone please think of the children!!!!
don’t worry…. no-plan-pact are going to solve this by raising the minimum wage……zzzzzzzzzzzzzz
Wellp, price of weed has fallen 50% since Covid, so there’s that.. maybe because everyone and their granneh selling it for 10x the profit.
Prohibition only keeps it lucrative. Legalise and create another tax revenue stream.
@3:34 pm – erm….my guy doubled his prices. 🙁
Cost of ammo went up 😂
And fuel.
827 is a fake.
OMG going to get worse, how worse can it get. Come on Pact Govt help the poor retired civil servants with a descent pension. They all earned it. When these guys retire they all have their fat pension to receive by lump sum and monthly payments. I am a pensioner living overseas, and want to return but my monthly pension payments will not be able to sustain me. NAU is overwhelmed. We need help.
Decent.
earned?
The moral compass of Cayman’s colluding “business” owners aren’t guided by CPI. Many have been raising prices all through Covid. Cayman needs consumer protection laws, landlord tenant act, legal practitioner regulations etc. It’s the Wild West.
Of course retail prices are going up. The cost of goods from suppliers has increased, not to mention the cost of shipping, which has damn near tripled in some cases. A container that used to cost under $5k now costs over $14k, and Govt collects Duty on that shipping cost, which is frankly IMMORAL considering that CI has no alternative but to import everything that we consume.
Those laws usually result in empty shelves and housing shortages.
And we still only receive $1000 pm and others less.
And the government was warned before they implemented a minimum wage, that all it would do was create inflation.
well….look at that. Not one economist in the bunch.
Already the price of fuel is insane..
Thanks PACT.
Not really.
https://www.globalpetrolprices.com/gasoline_prices/
Just wait until we factor in a higher minimum wage and forced employment of unemployables.