GDP grows by 4.2%, nears CI$71k per capita in 2023

(CNS): The Cayman Islands’ real gross domestic product (GDP) expanded by an estimated rate of 4.2% last year, a slight decline from the growth of 5.2% in 2022. The nominal GDP per capita income was estimated at $70,985 for 2023 even though, according to the last Labour Force Survey, well over 60% of the working population here earns less than that per annum, compounding the cost of living crisis for most people.

As the economy grows, it is increasingly benefiting only the wealthy, and in 2023, ordinary people dealt with crippling inflation at over 3.8% following 2022, which had seen the cost of living soar by 9.5%.

While the latest numbers from the Economics and Statistics Office show an ever-expanding economy in the Cayman Islands, wealth is increasingly concentrated in the top percentile of earners, and the trickle-down economic policy pursued by successive governments is no longer helping local families.

Growth was led in part by the tourism sector, as hotels and restaurants grew. However, the wages of those working in hospitality remain low as the government fails to address the minimum wage. The cost of utilities also increased economic activity, which, alongside the cost of food and housing, fuelled the continued inflation pressures on the working and middle classes alike.

Total employment increased by 3.8% to 58,504 in 2023, but this lagged behind the expansion in the labour force, which resulted in the unemployment rate among Caymanians rising to 5%, the ESO noted in the report. As the local population continued to grow and visitor numbers increased last year, electricity consumption also rose by 7.8%, while water consumption rose by almost 12%.

The development and construction sector also had a very good year, with the value of project approvals and certificates of occupancy in Grand Cayman rising by 27% and 13.6%, respectively, compared to 2022. However, building permits declined by 10.7%, which reflects the number of projects completed in the year and has little bearing on the state of the market.

While real estate activity contracted, with the total value of property transfers falling by 8.9%, that still represented a whopping $1,155.6 million in sales. GDP is also projected to expand in 2024 by 2.8%, primarily due to the expected growth in tourism and auxiliary sectors.

External pressures are expected to cause the inflation rate to be 2.1%, and the overall unemployment rate is projected to be 2.9%.