Finance Minister Chris Saunders said that preliminary results for the 2021 financial year showed a smaller than projected core government deficit of about $10 million.
Previous government estimates in the Strategic Policy Statement forecasted a deficit of $15.7 million. A pre-election assessment by the Ministry of Finance even expected a shortfall of about $98 million, the finance minister said at the government press briefing on Thursday.
“The good news is that we’re not as bad as when we started out,” he said. “To achieve a $10 million deficit from the hole, in which we started, I think that’s actually pretty good.”
Despite the absence of tourism revenues, government’s financial performance last year was buoyed by record revenues from fund, company and partnership registrations and stamp duties on land transfers.
However, the deficit for the entire public sector, including statutory authorities and government companies, is significantly larger, as for instance Cayman Airways, the Airports Authority or the Turtle Centre were hit by the limitations to air travel and tourism.
The latest 2022-23 Plan and Estimates in December of last year anticipated a 2021 deficit of $59.3 million for SAGCs alone.
In 2020, a year that included a pandemic-related lockdown of the local economy, government recorded a $72 million deficit, of which -$58 million was attributed to core government and -$14 million to SAGCs.
The official 2021 full-year results and January’s figures still have to be finalised.
But Saunders said in the first month of 2022, government is looking at a $169 million surplus, from approximately $238 million in revenues and $69 million in expenditures.
This is somewhat below the budgeted surplus of $197 million for January outlined by government’s Plan and Estimates document. This foresaw $275.4 million in revenue and $78.3 million in expenditures.
A large surplus at the beginning of the year, when most of the fee revenue from the financial services industry is collected, is important because according to government’s own calculations it only expects a surplus from January to March 2021, followed by a deficit each month for the remainder of the year.
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