Cayman to beat regional economic slowdown
(CNS Business): The Cayman Islands is set to weather a regional economic slowdown, local officials have said, that will see the domestic economy grow by more than 2% while states across the region could see less than a half percent growth in their economies. The UN Economic Commission for Latin America and the Caribbean (ECLAC), which launched its economic survey results at the end of last month, is pointing to a slowdown in the region. But economists in Cayman are much more optimistic.
Officials say that sustained growth in tourism and greater investment in public-private projects, as well as higher demand for goods and services, will fuel local growth and insulate the Cayman economy, which is also more dependent on its powerful northern neighbour, from any regional slow-down.
Economics and Statistics Office Director Maria Zingapan said that while the ECLAC predictions were only 0.5%, this was down to expectations of a downturn in South American. The Caribbean is expected to see average growth rates of around 1.7% but Zingapan said Cayman could expect to do better than that, with predictions of a 2.1% growth, matching the rates for 2014.
While the ECLAC report is also predicting problems in the regional labour market, the ESO is pointing to a continued fall in the local unemployment rate to 4.7%, as well as a steady rise in national GDP figures. Despite expectations of the global economy’s slow growth during 2015, with the deceleration of China and other emerging economies, Cayman’s number crunchers are confident that the economic will continue to improve.
During his recent budget address Economics and Finance Minister Marco Archer was also very optimistic about the domestic economy and described the economic landscape as “favourable”, with overall growth, especially in tourism, on an upward trajectory. While the world economy may be forecast to slow, Archer pointed to growth in the United States of some 3.1% in 2015 as an important indicator for Cayman’s own future fortunes.The minister said local moves to stimulate the economy by reducing the cost of doing business through lowered import duties would have a positive impact on disposable income.
Archer predicted that Cayman’s growth over the medium-term would be driven by the construction sector and private sector investment projects, such as the Dart’s Kimpton Hotel and Condominiums project and the redevelopment of the former Hyatt Beach Suites Hotel. Government, he said, would also help to maintain the positive growth with the revitalization of George Town, the airport and the now increasingly controversial port project.
“Barring any major global events, whether man-made or natural, which could negatively impact the growth of our tourism and financial services, real GDP growth for the Cayman Islands is forecast at 2.1 percent in 2015/16,” he said. “Thereafter, the growth rate is forecast to grow to 2.3 percent in 2016/17 and 2.6 percent in 2017/18,” he added.
