Cayman’s recession among the worst worldwide

 

Economic activity in the Cayman Islands has dropped for the third consecutive year, according to the 2010 Economic Report released by the Economics and Statistics Office.  

Comparative data from the International Monetary Fund and the World Bank shows that Cayman is currently experiencing one of the longest lasting recessions of any economy in the world.  

Cayman’s estimated gross domestic product for 2010 fell by 4 per cent compared to the previous year. This economic decline follows a drop in GDP of 7 per cent in 2009 and 0.7 per cent in 2008 in real terms. 

In the Caribbean, only Trinidad and Tobago suffered a worse economic decline than Cayman but the recession there began later and so far has lasted for only two years. Jamaica is, together with Cayman, the only economy in the Caribbean that posted a negative GDP in 2008, 2009 and 2010. Worldwide there are only a handful of countries, for example Ireland and Latvia, which saw their economies contract in each of the past three years.  

The majority of developed and developing countries witnessed shrinking economies predominantly in 2009 before recovering again in 2010. 

However, Bermuda, an island economy comparable to Cayman, has shown a similar economic performance with a contraction of GDP of -0.3 per cent in 2008, -8.1 per cent in 2009, an estimated -4 per cent in 2010 and an expected -0.5 per cent in 2011. 

The comparable economic structure together with a large transient population and out-of-control public finances appears to have a similar effect in Bermuda and the Cayman Islands. 

In Cayman the economic contraction was exacerbated by both lower population numbers and less demand by public institutions as the government curbed spending to control budget deficits and spiralling public debt.  

The significant reduction of Cayman’s expatriate population continued as weak economic activity and higher work permit fees resulted in lower demand for foreign labour, the ESO report said. In total there were 6,000 fewer work permits outstanding in 2010 than in 2008. 

At the same time Cayman’s population of 54,400 at the end of 2010 was approximately 4.6 per cent smaller than just two years earlier. 

This population decline directly translated into less economic activity, as imports to Cayman fell from a value of $879.4 million in 2008 to $735.9 million in 2009 and $688.3 million in 2010. 

The strongest reduction of economic activity affected construction (-24 per cent), wholesale and retail trade (-6.5 per cent), real estate (7.7 per cent) and financing and insurance services (-3.9 per cent), the ESO statistics show.  

In the financial services industry the number of mutual funds (-0.9 per cent), insurance licenses (-5 per cent), banking and trust licenses (-7.9 per cent), trust companies (-6.6 per cent) and stock exchange listings (-15.2 per cent) all declined in 2010, in most cases for the second consecutive year. 

New company (3.7 per cent) and new partnership registrations (19.9 per cent) in contrast were on the rise. However, the total number of active companies declined by 1.8 per cent to 91,206, where as the number of active partnerships increased by 9 per cent to 10,222, according to General Registry figures. 

The tourism sector was one of the few bright spots in 2010, growing by 5.2 per cent with both the number of air arrivals and cruise visitors higher than in 2009, resulting in a total of 1.89 million visitors to 
Cayman in 2010. 

1 COMMENT

  1. Cayman may be slow like a turle in coming out of a recession, but what really matters is that we are indeed coming out. We are not in stagnation. Cayman is carefully moving along the road of progress, and that is what matters!

  2. You must be kidding . Cayman is doing amazing compared to Florida and the rest of the once powerful , now trillions in debt USA . Your leaders may trip along the way but they run an EXCELLENT operation compared to the corruption we see and the sickening bloated Governments that seem bent on destroying the US businessman .

    Your Island jewel will THRIVE … THRIVE and enjoy a comeback like you’ve never seen before . I hope to be a part of in next year . Relax … have a cool drink … look out at the amazing view and smile … you live in a true Paradise on all levels.

  3. If indeed Caymans recession is omong the worst worldwide she is on a par with ireland over the last three years 150,000 people have left the country unemployment is still on the way up thousands of young people have qualified in various trades and certs etc for jobs that dont exist here,we are going to be in dept to the I.M.F. for decades to com. William Morey Cork Ireland

  4. LOL… People, the IMF are the same ones that appear to be against the Cayman Islands. Just recently in June of this year, classified these islands with dangerous tax havens. So its no surprise to publish such a negative report worldwide.

  5. And part of that is because of the attitude of many Camanians. Remember Hurricane Ivan — the world wanted to step in and help us, including the USA — we said No, thanks, we can handle this ourselves… and we did — and put ourselves billions of dollars in debt in doing so. Had we accepted help, we would not have spent so much of the government’s money and gotten back on our feet a LOT sooner.
    Another reason we’re losing tourism dollars — is our arrogance about the cruise ship docks. No, we don’t need them — the shop owners in Georgetown don’t mind waving at the cruise ships as they bypass Cayman because our docking facilities are woefully inadequate and have been for a decade.
    And the ridiculous protest at Lover’s Wall in East End — they don’t want commercial docks built there. No, lets bury our heads in the sand and hope progress bypasses us and pretend that we’ll just be fine.
    WAKE UP AND SMELL THE COFFEE. We need progress to stay alive. Otherwise, more and more violent crime and no jobs — and people leaving the island in droves. Is this what you want, Cayman ??? Because that’s exactly what you’re going to get.

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