Gibraltar Economy Doing Well

by Amanda Banks, Tax-News.com, London

10 August 2006

The Government of Gibraltar has reported that GDP growth in 2005 is likely to have been 7%, after 10.4% growth in 2004. Per capita GDP will have recorded a new high of GBP21,000, the 10th highest in the world.

The Government is estimating revenue of GBP250 million (up 1.63%) in 2006-07 and expenditure of GBP232.7 million (up 3.88%), resulting in a surplus of GBP17.3 million.programme. Public debt remains static in absolute cash terms at GBP93 million. This represents 15.7% of GDP, compared with the OECD benchmark of 40% and the EU target
under the Maastricht Treaty of 60%. Inflation is currently running at 2.9% and employment within the economically-active Gibraltarian population is estimated at 97% which represents almost full employment.

The government says that Gibraltar’s economy is well diversified, with tourism and financial services accounting for approximately 30% of the economy each, the port and shipping 25%, and service-related activities such as telecommunications, ecommerce and e-gaming accounting for the remaining 15%.

The number of visitors to Gibraltar reached 7.8 million in 2005. Arrivals by land and sea reached record levels and arrivals by air were the highest since 1989. Cruise ship passenger arrivals increased by 15.4% in 2005, reaching
the record level of 187,824 passengers arriving in 171 cruise ship calls. As regards other port activities, Gibraltar has for some years been the largest bunkering port in the Mediterranean.

The Financial Services Commission merged its banking and investment services supervision divisions on 1 April 2006. The merged Division is headed by Heidi Bocarisa, formerly Head of Investment Services Supervision. The former Head of Banking Supervision, David Parody, has assumed the role of Chief Operations Officer for the Commission on a full-time basis. In announcing these changes Marcus Killick, who in April commenced his second three-year term as Commissioner, said that the move represented a logical progression in the FSC’s aim of continuously reviewing the way it can maximise its effectiveness and efficiency.

“With most banks providing investment services as a major part of their product base, the skills of the investment team can be combined with those of banking to provide a cohesive supervisory approach,” he said. “At the same time the banking team can bring its experience in the practices and systems more common in large institutions and apply them in an appropriate way to the smaller environment that is common for investment firms.”

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