Cayman’s economy contracted by an estimated 6.7% in the wake of the COVID-related lockdown measures last year.
The restrictive measures, including ongoing border closures, combined with a fall in global and local demand, led to the real gross domestic product (GDP) decline, according to the Annual Economic Report 2020 released by the Economics and Statistics Office.
The economic contraction followed a period of strong expansion with an average GDP growth of 3.5% over the previous five years.
The ESO estimated that nominal GDP per capita income dropped last year to $68,674 from $72,658 in 2019.
The report highlights a decline in most sectors of the economy in 2020, with hotels and restaurants hit hardest, suffering a 76.6% decrease.
Services (-23.2%), transport and communication (-14.4%) and the wholesale and retail trade sector (-4.3%) also showed considerable contraction.
Construction activity, which rebounded strongly in the second half of 2020, showed mixed results for the full year. The value of building permits in Grand Cayman increased by 88.1% to $555.6 million, mainly due to commercial projects. The value of planning approvals, in turn, decreased by 0.8% to $883.2 million.
The total value of property transfers fell by 6.4% to $807.1 million, as both freehold and leasehold transfers dropped.
The finance and insurance sector, which accounts for approximately 32.7% of GDP, expanded by 0.3%. This was mainly due to a rise in insurance activities evidenced by a rise in net premium across most categories, the economic report noted. However, the domestic banking sector contracted despite a rise in credit.
On the other hand, COVID-mitigation efforts, and border closures, considerably increased activity in the healthcare sector (15.7%) and government services (7.2%).
During the year, the unemployment rate among Caymanians reached 8.3%. However, this figure masks that about 3,500 displaced tourism workers received a government stipend because they lost their jobs. Not all were recorded as unemployed.
Central government recorded an overall fiscal deficit of $116.4 million, as revenue collection declined to $797.4 million and expenditure increased to $913.8 million.
Merchandise imports fell by 6.3% to $1,114.4 million, reflecting declines of 37% and 2.2% in oil-related and non-oil imports, respectively.