(CMR) Premier Hon. Wayne Panton said the Cayman Islands' economy is strong and getting stronger as the country steadily recovers from the devastation of the COVID-19 pandemic.
Panton provided an extensive report on the economic prospects and financial forecast for the Cayman Islands in Parliament on Wednesday, 20 September.
“Madam Speaker, the Cayman Islands continue to show strong and stable positive growth. The hotel, restaurant, transport, storage, and communication sectors all grew in 2022 and further improved in 2023. International business is thriving. Shops are bustling and, for those that want them, jobs are available up and down the economic ladder,” he said.
“Despite the hardships experienced during the global pandemic, the financing, insurance, and business services sectors have shown remarkable resilience and have continued to expand even beyond expectations,” the Premier added.
He said preliminary indicators suggest that the economy expanded in real terms by 3.8% in 2022, a continuation of the recovery experienced since 2021, with the indicators for the first quarter of this year showing that the Gross Domestic Product expanded by 3.4 percent.
“This robust performance, Madam Speaker, was largely driven by a strong recovery in the hotels and restaurants and transport, storage and communication whilst maintaining strength in other sectors. In 2022, the hotels and restaurants sector grew 23.2 percent over the prior year with projected growth of 29.9% in 2023 and 17.0% in 2024,” Premier Panton explained.
He said the Department of Economics and Statistics projects overall economic growth of 3.1% in
2023 and 2.2% in 2024.
The premier further stated, “Having carefully navigated the critical recovery phase of the pandemic, our economy has emerged stronger. We are expecting economic expansion over the next two years, with the Department of Economics and Statistics projecting overall economic growth of 3.1% in 2023 and 2.2% in 2024.”
While there has been growth, the Premier admits that inflation continues to affect the people of the Cayman Islands.
He stated, “The rising cost of living on our Islands, especially for the most vulnerable, is one of the most concerning issues we are currently grappling with. Notably, in the first quarter of 2022, inflation reached 11.2%. The Consumer Price Index report for the first half of 2023 indicates average prices rose by a further 5.3 percent.”
The most recent quarter, ending June 2023, showed the consumer price index inflation rate was 4.1 percent, down from a consumer price index inflation rate of 6.6% in the first quarter of 2023. However, despite the slowdown in the pace of inflation, these increases remain well above comfort levels, Panton said.
The average inflation for 12 months of 2023 is projected at 5.2%, as the impact of central bank actions and improvements in the international supply chain temper price pressures throughout the year. For 2024, inflation is projected at 2.5%.
He said the Government has implemented several initiatives to help Caymanians deal with the inflation.
Revenues and Expenditures
Meantime Premier Panton said up to the end of August 2023, revenues amounted to $782.2 million, with the Government expecting that it will only be marginally “shy” of the year’s targeted $1.037 billion come 31 December 2023.
Panton said at the end of August 2023, Core Government’s closing bank account balances was $620.5 million, while Core Government debt balances stood at $471.7 million. While Government debt stood at CI$471.7 million as of 31 August 2023, the Cayman Islands’ resulting debt-to-GDP ratio of 7.7% remains amongst the lowest in the world – and is a very modest debt metric.
Expenses for the 8-month period ended 31 August 2023 were $647.7 million; this amount was $5.5 million more than the $642.2 million incurred in the comparable 8-month period ended 31 August 2022.
The full report can be found at this link: Publication Details | Cayman Islands Government
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