Buoyed by growth in tourism and construction and an unprecedented number of new company registrations, the Cayman Islands Gross Domestic Product grew by 4 percent in the early part of 2018.
The Cayman Islands First Quarter Economic Report, published Friday, records economic expansion across all sectors of the economy.
Growth has come at a price, however, with the report also highlighting increases in the cost of living, including higher prices for food and electricity.
Both trends are expected to continue for the foreseeable future, with the rising price of fuel and Cayman’s growing population driving increased household costs.
The Economics and Statistics Office report highlights the contribution of new hotels and restaurants and an ongoing construction boom to create better than expected growth in economic activity in early 2018.
It also highlights a reduction in government’s long-term debt as well as public sector budget surpluses as contributing to a strong economic position.
Finance Minister Roy McTaggart said in a statement: “We are on a healthy path to maintaining the islands’ economic growth and consistently moving from strength to strength annually.”
Rising international fuel prices were the biggest factor in driving up household expenses, including a 16.5 percent increase in electricity costs, as well as rising transport costs, particularly airfares.
The report also points to the “inflationary pressure” on goods and services associated with the recent increase in population.
Mr. McTaggart said government had moved to address the impact of increasing costs with a cost of living pay raise for civil servants and a review of salaries for teachers.
He added: “The uplift for civil servant pensioners as well as to retired Caymanians needing assistance will also help. And of course on Nov. 1 the personal import duty allowance when shopping overseas will be increased to $500 from $350.”
Overall, he said the economic picture for the Cayman Islands was good, with the estimated 4 percent growth eclipsing the 2.9 percent recorded for the same period a year ago.
In the first three months of 2018, the ESO report states, tourist arrivals grew 20.6 percent, new company registrations went up 41.7 percent, and partnership recordings rose by 28.7 percent.
Stock exchange listings rose by 30.9 percent, registering the highest level since 2009.
Core Government recorded a surplus of $190.7 million during the first two quarters of 2018.
Government also continued to reduce overall public sector debt, which was down to $432.8 million at the end of June 2018, according to the ESO.
Mr. McTaggart said: “Our surplus thus far is significant, our debts continue to fall. We have proved, and are continuing to prove, that we listen and we act to ensure that our robust economy continues to thrive at present and will endure into the future.”