Updated economic data for last year shows just how steep Cayman’s economy has fallen this year amid the COVID-19 pandemic and border closures that have led to the total collapse of the tourism industry.
The Economics and Statistics Office reported that Cayman’s economic performance in 2019 was one of the strongest in recent years, generating an estimated gross domestic product of 3.2%. Although GDP declined from 4.1% in 2018, it was still the second-highest economic growth rate since 2006.
On the back of a fast-growing population and labour force, merchandise imports saw a record year. This in turn meant that wholesale and retail trade grew at 6.1%, making it the fastest-growing industry in 2019.
Construction continued its boom last year, as the value of building permits almost doubled over 2018 to $490.3 million, driven largely by the high demand for residential property and, especially, apartments. The number of building permits increased by 30.1%.
Similarly, the value of planning approvals in Grand Cayman increased, by 18.4% to $890.4 million, due to both residential property demand and two approved hotel developments.
The hotels and restaurants sector grew by 5.3% last year, benefitting from the largest population to date, estimated at close to 70,000, and a record-high number of more than 500,000 stayover tourists. The number of cruise visitors, meanwhile, declined from 1.92 million to 1.83 million.
Finance and insurance, which according to the ESO accounts for 30% of the economy, expanded by 2%. Business services, such as legal and accounting, which make up about 15% of the economy, grew at the same rate.
The average inflation rate in 2019 was 5.7%, compared to 3.3% a year earlier. Inflationary pressures resulted largely from increased domestic demand, particularly for housing, the ESO said in its annual economic report.
Like the economy, government finances also ended 2019 on a high, recording an overall fiscal surplus of $102.1 million, as revenue collection improved to $860 million.
The strong fiscal position allowed the government to reduce its outstanding debt from $418.7 million as at end-2018 to $284.4 million as at end-2019.