The Cayman Islands economy is projected to grow at a steady, but unspectacular, rate through mid-2018, according to government financial estimates for gross domestic product.
Gross domestic product, or GDP – the monetary value of all goods and services provided within a country during the course of a year – rose 1.6 percent during the Cayman government’s 2013/14 fiscal year. Finance Minister Marco Archer said forecast growth for the 2014/15 budget year was 2.1 percent.
“These growth rates are the strongest estimated so far for the country during the post-2008 financial crisis,” Mr. Archer said, noting local economic growth in the areas of retail, hospitality, real estate including rentals and construction activity.
Future estimates put the growth of Cayman’s GDP between mid-2015 and mid-2018 at an average of 2.6 percent per year.
“There is a general consensus that presently an average annual growth rate between 2.5 and 3.5 percent in gross domestic product is considered respectable,” Mr. Archer said.
Economic growth in Cayman during the period forecast will largely rely on private investments in construction projects, the finance minister said.
Hotel and condominium developments along the Seven Mile Beach corridor, Beach Bay and the proposed Ironwood development in the center of Grand Cayman are factored in to government’s calculations. Also, major infrastructure projects, such as the downtown cruise berthing facility, Owen Roberts International Airport redevelopment and the East-West Arterial Road expansion into the eastern districts, are included as well.
Assuming those projects go forward, the government anticipates a corresponding drop in the local unemployment rate, which was estimated at 6.3 percent in 2013.
Mr. Archer said the overall unemployment rate was forecast to drop to 5.9 percent in the government’s 2014/15 budget year to 4.9 percent in the 2017/18 fiscal year.
During the 2013 unemployment evaluation, the jobless rate for Caymanians declined from 10.5 percent in 2012 to 9.4 percent in 2013. However, the jobless rate for non-Caymanian workers went up, from 2.4 percent in 2012 to 3.1 percent in 2013.
The numbers led to an overall increase in Cayman Islands unemployment from 6.1 percent in 2012, to 6.3 percent in 2013.
Mr. Archer said economic development, if it proceeds as forecast, should drive down the jobless rate for all residents of the islands.
“We have to be clear … as to whom we are building this country,” he said. “Nevertheless, it is accepted and expected that the unemployment rate for non-nationals will also decline over the same period.”
According to Premier Alden McLaughlin, the government is planning to invest what it can on various projects over the next few budget years, given a limited capital projects budget of between $47 million to $57 million. Those investments include:
$27 million for the expansion or widening of several main thoroughfares through George Town including the Linford Pierson Highway, Godfrey Nixon Way and Smith Road.
$8.5 million for the construction of what the premier termed a “proper mental health facility.”
$6 million to continue construction at the new John Gray High School.
$5 million in George Town revitalization, including road and public transportation enhancements.
$2 million for an improved public safety communications tower and better prisoner facilities at Her Majesty’s Prison, Northward.
$2 million to support procurement procedures for the George Town landfill/solid waste management project.
$5.5 million toward the development of a cruise berthing facility in George Town, mostly for value-for-money and environmental impact evaluations.