Cost of living pain reflected in ESO report

| 30/03/2022 | 88 Comments

(CNS): The Economics and Statistics Office has released the cost of living statistics for 2021, which reflects the pain that everyone has been feeling with the soaring cost of living. While the average annual Consumer Price Index (CPI) rose by 3.3% across the whole year compared to 2021, that disguises the much greater impact inflation was having by the time the year drew to a close. By the final quarter the CPI was up 7.6%, with prices rising in all the categories that the ESO measures.

As members of the public are all too well aware, there were significant increases throughout the year in the cost of everything, from food to fuel. However, a major problem for Cayman is that private sector wages are not increasing and they do not have the protection of cost of living allowances as paid in the public sector.

The minimum wage has remained at CI$6, the rate it was when it was introduced more than six years ago, while just a glance at local job vacancies shows very little upward trends in pay for ordinary workers.

But during the last three months of the year, the cost of transport recorded the highest average price movement in the CPI basket at 14.6%, largely due to the 27.6% increase in the cost of fuel. In other words, no matter how much people earn, it is now costing them that much more just to get to work.

Housing and utilities were also costing people 11.5% more in the fourth quarter of 2021 than the previous year, with electricity up by 26.5%, water supply by more than 13% and rents by over 5%.

Food price hikes were also reflected in the report, but the numbers fall far short of the reality, given the erratic nature of the supply chain at present and the constantly change prices at local grocery stores. According to the ESO, however, over the year the price of meat was up by 13.7%, vegetables by 10.8% and dairy by more than 9%.

While this report makes for painful reading, with the inflationary trend continuing, the CPI for the first quarter of this year is going to be even worse.

The ESO has also published the National Accounts Report and Balance of Payments reports for 2020, which show a fall in Cayman’s GDP after the local economy contracted by 5.7%. But that year was dramatically impacted by the local lockdowns and full border closures as well as the global effects of the COVID-19 pandemic.

See all three reports on the ESO website here.

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Category: Economy, Politics

Comments (88)

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  1. Anonymous says:

    Let me present a counterpoint.
    I went to a local merchant on Saturday and paid CI$60 for a non-perishable item.
    If importing myself?
    Amazon: US$52

    From Amazon but through a local reshipper who kindly estimates these things in advance:
    Taxes (since going to their US reshipping address) & CI Duty: US$23
    Shipping & Handling: US$18.50
    Admin Fee: US$2

    Amazon Shipping to Cayman: US$37
    CI Duty (22% on US$89): US$19.50

    Could I maybe order it in a bit cheaper than the examples? Yes.
    If I buy locally does my money circulate more through the local economy, to the store’s employees and even CUC? Yes.
    Even if the local retailer cost more than bringing it in myself would it be worth it to pay a markup to keep them in business so I have the convenience of walking in and purchasing instead of having to order in advance? Yes.

    Our local companies could avoid a lot of the disgruntlement directed at them if they published their gross profits. Then we can argue whether their profit margin is too much or not, like with CUC’s 15%. Just getting the fuel importers & retailers to do this (anonymously but granularly) via OfReg would be tremendous. The Chamber of Commerce could do the same public & member service within classes of businesses. It would go a long way to showing what the ‘fair’ cost of living & doing business is in the Cayman Islands. And that our stores are not making huge profit margins.

    Many of our retailers are actually ‘comparable’ with US / personal-importation costs. Especially when taking social costs/benefits into account.

    Buy local. (When you can.) From someone who also counts their pennies.

    • Anonymous says:

      If that’s what you’re doing, you’re not doing it right. 1) almost anything is no more than half as much on Amazon, Costco, Walmart, Target, etc. including tax so you paid too much 2) you should use an address in a place with low or no sales tax if you have to, 3) you should do your own shipping and handling in your own suitcase or a friends, it doesn’t take much to pay for SW from Ft Lauderdale and two free bags 4) no duty on stuff in your suitcase. Keeping Foster’s and Kirk’s flush isn’t your job.

      • Anonymous says:

        Right. I should fly to Ft Lauderdale for one purchase. Apparently keeping SW flush is your job. You can choose to hope that my numbers are wrong as much as you like but they are what they are.

  2. Anonymous says:

    With this, following Covid, a big social crisis is looming.
    Better learn to cut back, use birth control, cooperate and keep faith!

  3. Anonymous says:

    General cost of living in Cayman has less to do with Putin’s war, Biden’s economy or Covid lockdown effects than unnecessary Cayman Government fees (some illegal like Customs’ 1% insurance on all imports), some stupid regulatory requirements, merchants greed and no oversight (merchants charging customers excessive prices on duty-free items, merchants calibrating gas un US gallons, etc.)!!

    The latter factors are ALL locally generated!!

  4. Anonymous says:

    I’m not sure that inflation was 3%, I would say it was closer to 8%. Most likely, it was rental rates that were kept down by covid. However, it is hard to measure rent equivalency for homeowners and I can tell you maintenance costs are way up, like 15%. Just wait, the lag is going to see a 14% increase in inflation next year as landlords will hike because interest rates increases and to cover the higher costs and demand heats up as tourist return. Even if I am wrong about demand returning, the situation does not look bright.

  5. Anonymous says:

    Why does Folgers coffee cost 8 us in Florida, but 15 us here?
    Does it really cost 7 us to get it here ?

    • Anonymous says:

      5:57; Yes it does; with all the duty charges they have to make something!?

    • Anonymous says:

      Especially given coffee is duty free.

    • Anonymous says:

      Coffee went up 20% at Kirk Market since last Saturday. Have your phone calculator app open when you go next. Run some of the numbers on what you used to buy, you will see 20 to 30% prices raised on some items. Since last week.
      In particular , note that teriyaki marinated beef skewers are $32.99 a pound. Yes, you read right.

    • Anonymous says:

      Its not just the cost of shipping. I knew a store – several years ago – the owner worked out a rough average 100% of cost markup (and treating US$/CI$ as 1-to-1) to account for costs (shipping, duty, employee, rent, utilities) and small profit. So bought for US$5 they needed to sell for CI$15 to be worthwhile. In practice markup on some items was less, some more, depending on particulars – purchase & shipping costs and what the market will bear. Major stores probably have a similar multi-factor multiplier where every cost (except pay) has gone up.

  6. Anonymous says:

    eat longer…save money

  7. Anonymous says:

    Repeal import duty in fuel and you knock off a tiny proportion of the at the pump price. Limit the profit margin on fuel- different story. It’s price gouging people, not tax that’s driving the fuel prices. And if you don’t want to interfere with the “free market” ( actually a price fixing oligopoly) CIG just need a to enter into competition. Sell fuel from the government pumps at a set mark up in cost – that will force the private sector to compete or lose their business. Of course, in a properly run economy you would rely on an independent regulator to scrutinize and police the private sect, but we all know that’s not going to happen.

    • Anonymous says:

      Except CIG fills their pumps from the importer tanks. So to really do what you propose CIG would have to set up an entire import(and storage) and distribution network. Because ‘cheap’ gas in Industrial Park will not help anyone in any other district (including the rest of GT). – Be honest, who checks the pump price and changes station each week to save $0.05 per gallon? Even $0.25 per gallon? (Brac or LC the distance-per-dollar difference might work given how few fuel stations they have. But all that does is put 2-3 stations out of business. Basically subsidising fuel costs in the Sister Islands. It would be more efficient to just hand out cash.)

  8. Anonymous says:

    Don’t worry, it will get much much worse. This is what happens when you wage war on energy. Russia owns the woke, and the cost of everything skyrockets. So enjoy your Bidenomics!

    • Anonymous says:

      Ah… The Tucker Carlson junkie has joined the chat.

    • Anonymous says:

      Yeah, better to let Russia run amok in Eastern Europe, right? Putin is a savvy guy who will be satisfied with Ukraine and will leave the Baltic counties, Poland, Romania, etc alone, right? And all that business this week l about Russia teaming up with China to form the new world order is just talk, right? Why use your head when the Russians and FoxNews can think for you, right?

  9. Anonymous says:

    I’d say paying three times for a single result is also inflationary and has been here for awhile. The shortage on competence is a significant commercial drag uniquely tolerated in the Cayman Islands to preserve the feelings and profits of business owners that might be hurt from consumers and clients telling the truth. This is why consumers and clients need a transparent Better Business Bureau or other online consumer review mechanism where valuable vendor feedback can be aggregated and centralised. It would help differentiate those businesses that show up and do their job well enough to say it was completed satisfactorily. It would also help CIG to grade and pre-qualify bidders on million-dollar projects where incompetence routinely underbids competence, and leads to project delays, undoing/replication of effort, and cost overruns. Where does PACT stand on this?!?

  10. Anonymous says:

    don’t expect anything from cig….
    rememeber…cig are the ones who banned uber here to protect the rip-off taxi cartel.
    cig are the ones that prevent walmart from coming here to protect local store owners..
    cig are the ones that prevent any airline from under cutting the loss making, rip-off cayman airways…
    cig are the ones that limit people from using solar technology
    welcome to wonderland.

    • Anonymous says:

      Not to mention the horrible injustice at UCCI regarding adjunct (part-time) professors. They are paid $45 an hour of classroom time. Whether or not the university’s calculations include work outside of the classroom in lesson preparation and marking and student consultations, that is still a crying shame.

      The history of adjunct pay goes back several decades when it was assessed at $50 per hour. (You got that right). It was lowered to $40 (a 20% reduction–whoever heard of such a dramatic drop?) in response to the major recession of 2008, trigered by the 2006 mortgage crisis.

      It remained at $40 until last year or thereabouts when the Education sector was granted some increases. No, it did not even go back to the 2006 $50. It was raised to around $45.

      How crazy is that?

      Remember, too, that adjuncts do not get any benefits at all — no health insurance, nothing like a pension package. And by the way, the university is now on an advertising recruitment drive for adjuncts. (if you were a businessman and could get away with it, wouldn’t you make hay while the sun shines?–Unless of course, you had a heart.)

      Absolutely disgraceful and insulting.

    • Anonymous says:

      Pirates to the core! That will never change.

    • Anonymous says:

      As if walmart want to come!

    • Anonymous says:

      Because, as with the CPA etc, conflicts of interest are absolutely rife.

  11. Anonymous says:

    free money making solutions:
    allow sunday trading
    bring in weed tourism(to protect the fine caymanian christian ‘heritage’, only tourists and expats are allowed purchase)
    bring in casinos at top hotels (to protect the fine caymanian christian ‘heritage’. only tourists and expats are allowed)
    treble all traffic fines
    treble duty on cigarettes
    implement any recommendation of miiler-shaw or e&y reports.
    sell loss making cayman airways
    sell loss making turtle farm
    sell goab
    double stamp duty for non-resident property purchasers

  12. Anonymous says:

    been here 20 years…never heard of one fiscal policy by any government that would tackle cost of living issue in cayman.
    don’t expect any different from no-plan-pact

    • Anonymous says:

      No Consumer Protection Legislation and never will be as long as the select few Family Mafias and their mates run the show.

      Price Gouging is only enforced following a Natural Disaster i.e. Ivan and look how often that comes around.

      Piracy running rampant by all our Christian people as normal.

      • Orrie Merren says:

        Consumer protection legislation, which is lacking in many areas, is (almost) non-existent. Agree it’s needed.

        Not sure who runs the show, but (if it were up to me) I would enact consumer protection legislation.

        Agree that, following Hurricane Ivan, price gouging manifested in reality.

        Let’s keep “all our Christian people” finger-pointing out of the equation.

        God bless,
        Orrie 🙏🏻🇰🇾

      • Anonymous says:

        Exactly. A few families and their circle run things here..not the elected politicians.

  13. Anonymous says:

    All retailers and service providers in Cayman price gouge, wholesalers too. All of them. Whether you’re a supermarket owner, a nail salon owner, a gas station owner, an electrical wholesaler – you all price gouge.

    Price controls are needed in Cayman, its that simple. The rich don’t care what anything here costs as they swan about in their ridiculously priced cars and watches – and as long as Frank is flying his chopper around telling everyone how rich he is and Ken keeps doing his thing, nothing will change for the rest of us.

    • Anonymous says:

      Simple solution, bring your own stuff in. I’ve been doing it for 30+ years and probably saved about enough to buy a car. The so called retail establishments here buy retail or above my retail anyway, and then add 200% or more markup. Then again if there are fools around with more money than brains good luck to them.

      • Anonymous says:

        actually they buy retail and mark it up 270%

        so if that costs 10, they mark it up to 27 dollars.

        with everything.

  14. Anonymous says:

    no mention of Health Ins rates, – surely this has to be one of the biggest drivers for household expenses (less schooling) and will surely be the deciding factor for many on whether they can afford to stay here once they stop working

  15. anonymous says:

    What is happening with the Retirement Savings Arrangements that were supposed to be indexed since January 2017?

  16. Anonymous says:

    Wait h til PACTs welfare state policies fully kick in.

  17. Father of Three says:

    Is there any place in the world where consumers aren’t being robbed by inflation? I think I have had enough of the Cayman Islands!

    • Anonymous says:

      Even before inflation we ere still getting robbed by unscrupulous retailers that pad their prices with 200% or more markup. This is why more people are now purchasing overseas and importing their own stuff.

  18. Anonymous says:

    Time for a government that regulates prices for crucial goods.

    • Anonymous says:

      Then get ready to stand in line to buy.

    • Anonymous says:

      Government intervention never works

    • Anonymous says:

      While I understand the sentiment, price controls through governmental means never has the consequence you think it will. Economic history will show you that. Merely saying, ‘you can’t charge more than $X for product Y’ will lead to shortages of that product.

      Is there an easy answer to this question, no. But price controls have been tried time and time again and it never works. Maybe we can talk about why it doesn’t and what factors lead to it so we can address the root of the issue instead of plucking the fruit hoping it kills the tree.

    • Anonymous says:

      6:44 Price regulation on goods has proven to fail time and time again and often makes the situation worse as it triggers panic buying and hoarding. Price control is not the answer..

  19. Anonymous says:

    Cost of living wage for civil service? I believe that happened once – if my memory serves me correct – that was in 2019. No cost of living wage was given in 2020 or 2021 – they said it was because of the pandemic that it was costing government too much money. But yet PPM government gave Parliament members an increase in salary.

    Pact government gave a $500.00 bonus in December.

    With the high cost of living now in Cayman – civil service need that cost of living increase. Don’t know how anyone can servive living on this island.

    • Anonymous says:

      Which PACT members have left in place and currently enjoy.

    • Anonymous says:

      While I beleive the civil service is bloated and not fit for purpose, the notion that Parliment will raise their own salaries year after year and ignore other sectors of the government is upsetting. I have family that works in government and CoL adjustments are rare and barely do anything, yet year after year those already well over a decent wage sign papers to give themselves raises.

      I would argue though that something needs to change and its not just the pay. Maybe we need to start looking at the system we are operating on and seeing how true improvements for all who live can be made.

    • Anonymous says:

      everyone needs the cost of living increase, not just civil service

    • Anonymous says:

      I haven’t had a pay rise for 5 years & I’ve never received a bonus (coming fiesnt pay them). Strictly 10 days sick leave & 25 days vacation. Maybe I need to become a civil servant? My health insurance up 11% this year. Condo insurance/strata up 8%.

      • Anonymous says:

        You are sick for exactly 10 days every year? Amazing!

        (I wouldn’t give you a pay raise either).

    • Anonymous says:

      You can’t have overemployment and a cost of living increase in the civil service.

  20. Anonymous says:

    As the world will be in chaos please grant us stability. Please let us understand we will need each other.

  21. Anonymous says:

    Let’s see how much attention this report attracts from the geniuses at the helm! More importantly, let’s see the management plan they present to help counter the projected worsening effects of inflation, for every Caymanian household. We can hope …

    • Anonymous says:

      Nothing will be centered around self sustainability for the island. There wont be any initiative for the island to produce even 5% of our own food. No initiative to promote households growing 5-10% of their produce and certainly no initiatives to actually get away from the CUC monopoly.

      While I beleive we are a good ways away from solar being fully efficient due to the storage of energy when the sun isnt shining, I’ve watch profit margins dominate the conversation and every attempt for people to just do their own thing is hampered because we are forced to use the gatekeepers (CUC). Well CUC, your profit margins and dividends wont be of any use if noone can afford to pay for it but I want you to have the same energy (pardon the pun) if that time comes. I don’t want any pandering or platitudes from your marketing team or C suite. I just want you to look at your profit margins and revel in how percentage points mean nothing in the grand scheme of things.

      The answer to anything here will always be loans and borrowing cash to pay someone else to the work for us. However the rest of the world will need the things they export to us and when that time comes, after years of promoting complete dependency on other nations, our ‘leaders’ will sign away our rights and futures while they take the silverware with them on the lifeboat as they run from the sinking ship.

      If there’s anything I’m certain of as a Caymanian who has been living here for 30+ years, is that Caymanians will leave their own behind and blame others for it.

      Now is the time to promote self sufficiency and independence for households because once its too late and we have no other option but revolt, everyone loses.

  22. Anonymous says:

    And it’s only just begun… scary

  23. Waylon says:

    Welcome back, hard times.

    Time to embrace our roots and start cooking frugal meals at home and limit driving as much as possible and conserve electricty.

  24. Orrie Merren says:

    The effects of the COVID pandemic, which has caused supply chain issues, as well as the current geopolitical climate increasing energy costs and rising interests rates, inter alia, call for wise navigation through this current (and upcoming) economic cycle.

  25. Anonymous says:

    I’ve said it before and I’ll say it again, the ESO doesn’t shop in the same supermarkets as I do. Those figures for the first part of 2021 don’t make sense.

    • Anonymous says:

      It’s their basket of groceries. I contacted them more than 20 years ago asking for it to better reflect what people actually buy, but didn’t get anywhere.

      • Anonymous says:

        They use non-existent public school fees in their calculations as well. You know, the ones that never increase because they don’t exist.

  26. Anonymous says:

    It is very hard to believe the average for the year was only 3.3%. Very hard.

  27. Anonymous says:

    They cost us millions to conduct a defective in person census during a pandemic and cannot with any accuracy tell us how many people are here, and we rely on them for accurate economic data?

    How about we disband them, the crazy customs system, and Offreg, and with the many millions in savings, reduce import duties and thereby reduce the impact of inflation and the cost of living. There is little we can do about the cost of internationally sourced goods. There is a lot we can do about the cost of our poor governance, and corresponding cost for the Caymanian people.

  28. Anonymous says:

    If minimum Wage is raised tomorrow to $20/hourv the only people to benefit will be the expats on permits.
    There are no labor controls or regulations so owners will still underpay and overwork the permit staff, and get much more “value” out of them than they would by trying to abuse the locals to the same extent.

    • Anonymous says:

      A living wage lowers unemployment, related pubic-funded social costs, reducing capital expense of permit fees, and necessity of surplus temporary migrant workers. It’s a win-win-win. There might even be a positive impact on opportunistic crime and housing supply pressure.

  29. Repeal Import Duty!! says:

    Repeal import duties on fuel, Fruit and vegetables immediately!

    If PACT government cares about us Caymanians they must temporarily remove import Duty on all basic items that persons need to survive and thrive.

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