The Cayman Islands economy grew at an estimated annualised rate of 0.8 per cent during the first three months of 2012, the government’s Economics and Statistics Office’s first quarter economic report shows.
The gross domestic product was lower than during the same period one year ago, when it stood at 1.2 per cent, and it was also lower than during any of the previous four quarters, which showed a GDP range of 0.9 to 1.3 per cent. However, the first quarter 2012 marked the fifth consecutive GDP growth quarter after a three year recession.
Cayman Islands Premier McKeeva Bush said the “modest growth” during the first quarter “reflects the sustained recovery of tourism-related sectors such as hotels and restaurants, wholesale and retail trade, and transport, storage and communication”.
The wholesale and retail sector, as well as transport, storage and communication saw the highest growth rates (5.5 per cent each), followed by construction (3.5 per cent), hotels and restaurants (2.5 per cent) and government services (2 per cent).
Contributing to the performance of the tourism sector was the growth in air arrivals by 2.5 per cent and in cruise ship arrivals by 8.4 per cent during the first quarter 2012 compared with the same period in 2011.
Mr. Bush ascribed the improvement in the construction sector in part to duty waivers for building materials. “There was also a modest turn-around estimated for the construction industry, which I believe was partly due to Cabinet’s decision to grant a partial duty waiver for building materials,” Mr Bush said. “The duty waiver was intended to achieve this purpose.”
The contracting sectors were financing and insurance services, real estate, renting and business services, and utilities. The number of banks and trust companies decreased from 246 to 233 and Class A insurance companies dropped from 29 to 27. At the same time, growth of new company registrations also fell by 1 per cent year on year during the first quarter. Only the number of captive insurer grew slightly from 720 to 728.
Work permit numbers decreased by 1.6 per cent to compared to one year ago to 20,107. However, work permit numbers increased over the previous two quarters, in response to a strengthening economy and higher demand, in part as a result of the tourism season.
Meanwhile, civil service employment remained flat at a total of 3,617, as a decline in foreign government workers by 2.2 per cent (22 people) was offset by an increase of 0.8 per cent of Caymanian government workers (21 people).
Overall growth of the economy was supported by an increase in merchandise imports by 8.4 per cent, reaching a total value of CI$184.6 million. The volume of non-oil imports increased by 1.5 per cent while that of oil imports increased by 5.4 per cent.
Credit from commercial banks to the private sector expanded by 3.8 per cent while public sector indebtedness to the local banking sector increased by 20.4 per cent.
In 2012 Cayman’s economy is expected to expand by 1.8 per cent, after a 1.1 per cent growth in 2011, the ESO report said, although it is not clear whether this forecast takes into account the modest first quarter performance.
Related Videos
