January to March 2012

The Cayman Islands annualised Real GDP rose by an estimated 0.8 per cent in the first three months of 2012 as compared to the estimated 1.2 per cent increase in 2011.

Higher growth rates were estimated for wholesale and retail (5.5 per cent), transport, storage and communication (5.5 per cent), construction (3.5 per cent), hotels and restaurant (2.5 per cent) and producers of government services (2.0 per cent).

The contracting sectors were utilities (-2.2 per cent), financing and insurances services (-2.1 per cent), and real estate, renting and business services (-1.6).

The Consumer Price Index remained almost constant, moving marginally up by 0.1 per cent compared to March 2011.

Domestic credit expanded anew by 5.6 per cent driven by a 20.4 per cent increase in credit to the public sector and a 3.8 per cent increase in credit to the private sector. A higher level of domestic lending to the private sector is traced to household lending activity.

The Cayman Islands prime lending rate remained at 3.25 per cent. Nonetheless, the weighted average lending rate on KYD fell by 16 basis points from 7.38 per cent in the first quarter of 2011 to 7.22 per cent in the same period of 2012.

Following modest recovery in its overall performance, activity within the financial services sector in the first quarter of 2012 was mixed amidst renewed global financial uncertainties arising from the European debt crisis. Upturns were noted for mutual funds registration (7.9 per cent), stock exchange listings (3.3 per cent), and insurance (0.8 per cent). However, downturns were recorded anew in banks and trusts (-5.3 per cent) and new company registrations (-1.0 per cent).

Total merchandise imports rose by 8.4 per cent to register at $184.6 million as non-oil imports expanded by 5.5 per cent and fuel imports rose by 20.2 per cent. The total values of oil and all petroleum-related products increased by 19.8 per cent to $42.3 million; food and live animals 11.8 per cent and manufactured goods classified chiefly by material (36.7 per cent).

Port calls in the first quarter of 2012 rose by two to 116 compared to a year ago. Overall the volume of imported cargo increased by 1.4 percent to 54,608 thousand tons; which is attributed to a 4.2 per cent rise in break bulk cargo to 650 tons that countered the 1.9 per cent decrease in containerized cargo. Although, both gas and diesel volumes declined, AV Jet and propane imports went up by 7.6 per cent and 5.8 per cent, respectively.

The value of project approvals increased during the review period by 47.9 per cent to settle at $46.7 million. This growth is traced to higher development intentions for apartments, government and industrial projects. The number of projects approved also increased by 32.4 per cent to 237.

After its peak record last year, the total value of property transfers reverted to a lower level of $116.6 million. This however remains higher than the recessionary years of 2009 and 2010.

Electricity consumption rose by 0.9 per cent while water consumption fell by 7.4 per cent. In telecommunications, all demand indicators moved downward in the first quarter of this year.

Finally, the overall fiscal deficit deteriorated to $13.7 million in the first quarter of 2012 as compared to $3.7 million a year ago. This resulted as total revenue declined by 7.7 per cent whilst total expenditure was lower by 0.4 per cent. The total outstanding debt of the central government increased to $609.1 million from $561.0 million a year ago.