The Cayman Islands’ economy grew by around 3 percent in the first six months of 2016, according to a recently published report by the Economics and Statistics Office. The Gross Domestic Product – the total value of goods and services produced and provided during one year – for 2015 showed that the local economy expanded by 2.8 percent, the highest recorded rate of growth since 2007. Finance industry experts highlighted Cayman’s growing financial services industry as a key reason for the overall growth in the economy.
Cayman Finance, the association that speaks for Cayman’s financial services industry, welcomed the news. Jude Scott, CEO of Cayman Finance said: “This is solid proof of the resilience of the Cayman Islands economy and also reaffirms the importance of our financial services industry.”
Mr. Scott explained that recent reports from the ESO indicated that the financial and insurance services industry posted a 2.1 percent growth in 2015, which was the strongest since 2007.
“This growth in financial services is particularly important because the financial services industry, including all financial services professionals, contributes over 50 percent of the country’s GDP,” he said. “This continued growth shows that our services continue to be in high demand globally. It also indicates that our jurisdiction continues to strike the right balance in ensuring that we meet the highest global standards while maintaining our commercial success. As a result, the industry contributes over $300 million annually to government revenues and employs thousands of Caymanians.”
According to the ESO reports, Cayman’s economic growth has actually increased quarter by quarter over the first half of 2016, as the first quarter growth of 2.4 percent further strengthened to 3.2 percent in the second quarter.
“Just a few months ago The Banker magazine’s 2016 survey confirmed the Cayman Islands position as the world’s No.1 specialised financial centre, adding to the global view that the jurisdiction has maintained its robust position as a world leader in financial services, a key driver of the country’s economy,” Mr. Scott added.
In addition to economic growth, for the third quarter 2016, the total value of imports to the Cayman Islands grew by 8.6 percent to reach $194 million compared to $178.7 million a year ago. The increase this quarter maintained the trends shown in the first and second quarters of the year.
On the downside, however, consumers have seen an increase in prices. According to their report, the ESO noted a Consumer Price Index increase in the third quarter of 2016 by 0.5 percent compared to the same period in 2015, the first time that the CPI increased after six consecutive quarters of decline. The CPI is a measure that examines the average of prices of a basket of consumer goods and services, such as transportation, food and medical care.
The largest contributor to the increase in the CPI was the 6.6 percent rise in the price index for restaurants and hotels. In particular, accommodation service fees had a significant increase of 8.7 percent in the third quarter over the same quarter in 2015. Average prices of restaurants also went up, the report said.
Other divisions that recorded increases in their price index were recreation and culture by 2.6 percent and education by 1.2 percent. The increase in education, relating to pre-primary and primary school fees, occurred as the new school term started in September last year.
Higher housing rentals and fees for maintenance and minor repair of properties also impacted the price index housing and utilities which rose by 0.5 percent. Lower oil prices continued to moderate the CPI as shown by reductions in electricity charges and the operation of private transportation, the report highlighted.
News Source: The Cayman Reporter