Year begins with huge surplus but deficit still forecast
(CNS): The Cayman Islands Government’s financial report for the first quarter of this year has shown a significant surplus, despite higher than expected spending, resulting in the prediction made before the election that 2025 could end in deficit. The first unaudited accounts for this year, covering the pre-election period between 1 January and 31 March, show that the CIG earned $65.7 million more than expected in the budget. And despite spending over $17 million more during this first quarter than forecast, the surplus is still $54.6 million more than had been predicted when the budget was voted in parliament.
While this appears to contradict the predictions made before the elections, the whopping surplus of $268.1 million for the Entire Public Sector (EPS) over the first three months of this year is not unexpected, and it may not prevent the government from facing a serious deficit by year-end unless it can cut spending.
The CIG always collects a significant part of its annual revenue, especially from the financial services sector, in the first quarter and then generally spends more month by month than it collects in revenue. Officials from the treasury said that this surplus could easily be consumed before December, as significant surpluses in the months of January to March are typical.
“It is also typical for the government to experience monthly deficits,” an official from the finance ministry explained to CNS in response to our inquiries. “For April 2025, indications are that there will be a deficit for the month of approximately $22.00 million, which is double the deficit incurred in April 2024 of $10.68 million. Like 2024, it is expected that the last nine months of 2025 will experience monthly deficits.
“Therefore, the $291.9 million surplus as indicated in the 2025 1st Quarter Report will be significantly reduced by the monthly deficits that are typical in the last nine months in each year,” the official added.
The government technocrats said there could still be an overall deficit at the end of this year, as indicated in the 2025 Pre-Election Economic and Financial Update. The official added that the “projection of a deficit for 2025 is not inevitable, but it will require deliberate and corrective action to be taken by government to avoid such an outcome”.
The CIG is unlikely to implement any new taxes or fees, though it could roll out the Department of International Tax Co-operation (DITC) filing fees — new coercive revenue that was expected to start this year. However, the last administration made a policy decision not to implement them, according to the report. Even if it does, those fees would not plug the predicted budget gap, which means that the CIG will need to target spending.
The unaudited results for the first quarter show that the government spent $17.3 million more in January, February and March than the 2025 budget forecast and more than $33 million than it spent during the same period in 2024.
Some savings were made in personnel costs as well as supplies and consumables amounting to more than $14.5 million, but that was wiped out by higher than budgeted levels of expenditure in outputs from statutory authorities and government companies by $4.6 million, outputs from non-governmental suppliers by $11.4 million and transfer payments by $19.5 million.
The report also notes that the savings made in personnel costs and supplies might not be sustained and could be spent later in the year. Vacant posts and delayed projects could also see those savings spent after all. While government revenues continue to climb year on year, so does expenditure, as the services the government supplies to the growing population also increase.
Ultimately, it is not a lack of revenue but these expenditures that will pull the budget into deficit unless the new NCFC administration can take corrective action.
See the full report in the CNS Library.
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Category: Government Finance, Politics
Andre Andre Andre smh
As stated in the article and I quote
“The CIG always collects a significant part of its annual revenue, especially from the financial services sector, in the first quarter and then generally spends more month by month than it collects in revenue. Officials from the treasury said that this surplus could easily be consumed before December, as significant surpluses in the months of January to March are typical.”
We must not be fooled. Every year, every company registered in the Cayman Islands must pay their annual fees. Most these fees are due on January 1st of each year. Law firms and other financial institutions in Cayman rush to collect the funds in order that each entity remain in good standing. If the fees are not received and paid into government on time each accrue a penalty. CIMA penalties are accrued starting on the 15th of January and ROC penalties for nonpayment of annual fees start accruing on March 31st.
That is the reason that Government starts the year off with a surplus, because of the annual fees they collect from each company registeted here all are due at the beginning of the year. Its always been this way. Nothing new.
So be it then , why does the elderly, senior citizens and under 18s have to wait around until Jan 2026 to obtain Cinico Coverage. Why not make it effective immediately. Something not adding up!
We can’t afford to cover all the kids on island. Especially since 70% not Caymanian and many have parents with insurance who should be responsible for them.
Is it a surplus or a deficit? At this time we really don’t know who or what to believe. Was it a mistake? Was it deliberate misleading ? There needs to be a forensic audit done by an independent auditor (s) ASAP. How can ministries continue to spend and deliver judicially without being certain of the financial situation?
please Andre, tighten the belt in your first 18 months then lets see what we can realistically do and more so , what needs going much more than other projects
Also cancel the new prison, which is costing THREE times the cost of the Brac school . Do we really want to spend $180-$200Million we don’t have on something we don’t need..?
kenneth Jefferson should be asked to resign immediately.
There is no other way to say this, Caymanians will believe anything.
First Wayne told us he was the saviour and we ate up the PACT scam.
Then Andre and Dan told us we were heading for dire straights with the deficit, and we ate that up and ended up with the bastard child or CINP and TTCCP.
Elected on deception and blatant lies. Well all yall celebrating the re-birth..reap what you sow!!!
100 percent correct. Instead of researching for 5 minutes, they ate up all of their lies even after their disastrous first term in charge. Only silver lining is they will have nobody left to blame after this term, if they even make it 4 years.
Cancel the outrageous Brac school and Scranton ghetto projects as a start.
Also cancel Kenny Beach.
Northward resort $8Million consultants.
Kenny private terminal.
$Millions being frittered on vanity and vote buying projects can be reversed.
yo that is nasty how dare you worry about money over Education.
Cayman has never had a revenue problem, we have a serious spending problem.
Imagine how much lower cost of living would be if government included the massive liabilities not stated within those “unaudited” figures, and saved prudently instead of borrowing.
That is not true. Check 1999
Every year it begins with a surplus, until the end of the forth quarter arrives. Cayman Kind
…”fourth…” quarter.
I pointed this out, just in case JuJu is reading. We’d hate for her to feel she failed the entire population of the three islands in educational outcome.
Generous of you to assume Juju would see something wrong with that.
From another source: “Bryan said the variation between the pre-election report and the first quarter report could only be described by intentional intervention or incompetence.” Well, as Minister of Tourism he worked with K. Jefferson for four years…
LOLOLOL
Kenny is now irrelevant. We don’t have to listen to his non sense for the next four years and he may not ever be re-elected again.
One can only hope
As any business owner will tell you, the cash in the till is not his , only what’s left over after bills and obligations are settled.
Even what’s left over has to be managed and some put aside as a contingency fund.
Juju Kenneth TooDumb and their gang treated our income as if it was their personal Piggy Bank.
Thankfully we now have wiser heads to manage our finances.
Ask the AG who put us in massive debt. PACT increased our debt from $249m to $454m from 2020 to 2022 BEFORE UPM took over. Stop believing the lies told by former members of PACT now in government. They were using UPM as scapegoats. UPM did spend when they should not have but PACT are responsible for our current massive debt.
I sure wish I could use their spiffy accounting practices in my life; imagine being able to not account for your obligations, loan repayments, mortgages, and call the difference a “surplus”! Weeeee! Time to buy a new car! Clothes, Travel! No need to pay bills or fret about our gargantuan health care insurance. Nope! That will all be factored in and a minimal amount applied during my Year-end budget. The best part? All my creditors will patiently await me paying a fraction of the money due them.
Good times await. Now, if I can just talk FLOW, insurance company, HSA and CUC into accepting my plan, I will be golden!
Are there any words left for the riff raff, thieving, abusive, self gratifing … let’s see their bank accounts!
There are words, but not printable. Hopefully the voting public has seen that self serving, uneducated, and unprincipled unemployables should not be put in positions of power where they can do damage.
Juju’s account will have of course grown to a very healthy sum.
Kenneth’s will be very impressive considering he came to office as a failure in every venture, and too Dumb will also have a considerably fattened bottom line, all at the expense of the public purse.
Oh how strange, the lies told by Andre are coming out already. I will guarantee that he also somehow tries to spin this and claim that his previous PACT government is responsible for the excess surplus. I hope you realize fast that he used fear mongering and you all ate it up.
How does André come into this? He did not prepare the “PREFU” or whatever it’s called.
Because he blamed PPM for issues, blamed UPM for issues and tried to scare the public into believing the UK were hinging on taking control of our finances when everything was a lie. Not to mention he was part of the government that blew through $200m in borrowing in 2 years!
You sir, or madam, are financially illiterate. So please spare us your ignorant posts.
The financial services industry, which funds over 70% of your government, pays most of its fees in Q1. Just because all that “cash” comes in Q1 doesn’t mean you’re running a surplus. It’s just timing.
But by all means build your $100 million JuJu monument in the Brac. And a $400 million cruise dock. And then wonder why the country is bankrupt.
Newsflash. Andre won. You lost. Get over it.
Andre won, we all lost. You will soon see that.