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Cayman Islands Economy To Grow In 2011

by Amanda Banks,, London

12 July 2011

In spite of a fall in GDP last year, the Cayman Islands economy is expected to return to growth this year, according to Premier and Finance Minister McKeeva Bush.

Commenting on the release of "The Cayman Islands' Annual Economic Report 2010", Bush said that the positive trend would be repeated through to 2014. Such projections were based on local economic forecasts and the prediction of modest worldwide growth, coupled with the anticipated results of government action in the private sector.

The report shows that the Islands' GDP fell by 4% in 2010, an improvement on the 7% decline seen in 2009. This drop is attributable to issues in the construction, real estate and financial services industries. As a result, real GDP per capita decreased from KYD43,363 (USD52,107) in 2009 to KYD42,605. Inflation averaged 0.3% in 2010, but this is predicted to increase to 1.9% in 2011, due to rising international food and oil prices.

In the financial services sector, there were two opposing trends. On the one hand, new company registrations and new partnerships rebounded. On the other, the report records downturns in mutual fund registration, stock exchange listings, insurance licenses and bank and trust licenses.

Elsewhere, the availability of banking credit improved. Domestic credit from commercial banks grew by KYD171.3m. Public sector financing from the local banking sector was up by 16.8%, and credit to the private sector rose by 5%.

The report projects GDP growth of 0.9% for 2011. This will be fuelled in part by what is expected to be a strong recovery in tourism, which was up by 5.2% last year. The government can also anticipate a robust performance in the financial services industry, according to the report.

TAGS: investment | economics | banking | insurance | gross domestic product (GDP) | investment funds | Cayman Islands | offshore | stock exchanges

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