Economic growth likely for Cayman Islands

he Cayman Islands Government is projecting that the country will likely bounce back from the last two years of economic contraction to see growth this year and up to at least 2014.

The prediction follow the release of the latest comprehensive report on the economy, The Cayman Islands’ Annual Economic Report 2010.

Premier and Minister for Finance, Tourism and Development, McKeeva Bush, said that while the economy contracted in 2010, “based on the forecasts made for the local economy along with the prediction of modest worldwide growth, and coupled with the supportive actions of the Government for private sector projects in the Cayman Islands, there is the bright and encouraging likelihood of growth within the Islands’ economy for the 2011 calendar year and beyond that to the Government’s fiscal years that will end on 30th June 2012, 2013 and 2014”.

The GDP growth projection for 2011 is placed at 0.9 percent, arising primarily from an expectation of a strong recovery in tourism along with a robust performance expected from the financial services industry.

Economic activity in 2010 declined as Gross Domestic Product (GDP) fell at an estimated rate of four percent as compared to a decline of seven percent in 2009. The major sources of decline in production came from the construction, real estate and financial services industry.

The financial services industry exhibited a mixed performance in 2010, as new company registrations and new partnerships rebounded. In contrast, downturns were recorded in mutual funds registration, stock exchange listings, insurance licences and bank and trust licences.

The Premier cited the tourism sector’s performance as robust, however.

“Tourism rebounded with a growth of 5.2 percent, with both air arrivals and cruise arrivals up by six percent and by 5.1 percent respectively to bring the total visitor arrivals to 1.89 million in 2010,” he noted.

The average inflation rate in 2010 was very modest at 0.3 percent, due mainly to the fall of the housing price index which offset the strong growth of food and electricity price indices.

Source: Caribbean360