Overall economic activity in the Cayman Islands grew by an estimated annualized rate of 1 percent in the first nine months of 2013, according to a report by the Economics and Statistics Office.
Hotels and restaurants (5.5 percent), construction (2.1 percent), real estate, and renting and business activities (2 percent) were the main sectors driving growth. Finance and insurance, the largest sector, expanded 1.8 percent.
Government said the economic growth had also improved government finances.
“I am pleased to report that with the growth of the economy, the overall fiscal balance of the central government improved to a surplus of $80.7 million as compared to a deficit of $1.6 million a year earlier,” said Marco Archer, minister for Finance and Economic Development.
“This resulted as total revenue grew by 15.5 percent while total expenditure declined by 3.1 percent. The central government’s outstanding debt continued to decline, amounting to $569.4 million as at September 2013, lower by 4.4 percent from the same period a year ago,” he added.
However, economic activity declined in wholesale and retail trade, transport, storage and communication, electricity and water supply, agriculture and fishing, government services and manufacturing in the third quarter of last year.
This may have been caused in part by a decline in the number of work permit holders on island by 0.8 percent.
Despite quarterly GDP growth rates of -0.6 percent, 1.2 percent and 0.8 percent in the first nine months, GDP growth for calendar year 2013 was maintained at 1.5 percent, as forecasted.
However, this assumes a considerable acceleration in growth during the fourth quarter, particularly in the wholesale and retail trade, as well as financial and business services.
The average inflation rate for 2013 was recorded at 2.2 percent, based on the Consumer Price Index surveys produced by the Economics and Statistics Office last year.
“This is the highest yearly inflation rate since 2008,” Mr. Archer said. “It shows the impact of higher international prices for some goods such as household equipment, clothing and footwear, as well as the result of policies that affected the prices of tobacco products and health insurance.” Ten of the 12 divisions of goods and services comprising the CPI posted price increases, led by alcoholic beverages and tobacco (9.8 percent), miscellaneous goods and services (8.5 percent) driven mainly by a 13.8 percent increase for insurance, household equipment (6.1 percent) and clothing and footwear (4.8 percent).
Education and food prices also rose by 4.6 percent and 3.2 percent, respectively. However, a reduction in the prices for housing and utilities (-1.4 percent), comprised of rental and energy costs, tempered overall price growth, given their relative weight in the basket of goods and services surveyed by the Consumer Price Index.