October 30, 2020

The Editor Speaks: Cayman’s growth is rising – fact, but are economic projections crystal ball gazing?


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In yesterday’s iNews Cayman we published the whole of Minister of Finance & Economic Development, Roy McTaggart’s address to the ’s .

The address came complete with fourteen impressive charts and tables that showed the overall unemployment rate in Cayman is to date standing at 4.4 percent and is expected to decline to 4.2 percent in 2019 and 4.0 percent in 2020.

They also showed Cayman’s grew in real terms by 2.9 percent. This comes on the back of similar growth of 3.0 percent in 2015 and 3.1 percent in 2016. This “is significantly higher than the forecast in early 2017 of 2.1 percent and the updated projection of 2.4 percent as of the third quarter of 2017.”

“Adjusted for inflation, the estimated GDP of the Islands reached $2.8 billion at end 2017, or $3.1 billion in 2017 prices.”

Everything showed a very rosy picture that included ‘positive’ growth in all major industries. In 2016 its gross value added 7.9 percent in 2016.

Overall, tourist arrivals reached 2.15 million in 2017, higher by 2.4 percent compared to 2016. The all-important stay-over tourist arrivals were up by 8.5 percent.

The largest sector of the economy is the financial and insurance services industry. “This industry directly contributes 41 per cent of GDP and grew by an estimated 1.4 per cent in 2017.”

“The professional, scientific and technical services sector which is comprised mainly of legal and accounting services, grew by 3.6 percent in 2017.”

“This industry directly contributes 14.6 per cent to total GDP, the second largest sectoral contribution to GDP.”

“Collectively, these 2 sectors contribute 55.6 per cent to our GDP, and it is on this basis that we acknowledge that the “financial services” industry contributes more than 50 per cent to the Islands’ GDP.”

This last quote taken from the address sent warning bells ringing in my head. “The FINANCIAL SERVICES industry contributes more than 50 per cent to the Islands’ GDP.”

I would have liked a breakdown of the factors and assumptions that went into the 2019 crystal ball gazing.

Did the ever increasing threats to our financial industry, with now the ’s meddling in our affairs and passing laws making us disclose financial information on our clients that only applies to us and UK’s other Overseas Territories, factor into crystal ball? This would also affect our employment figures as well.

I like the charts and tables but I want more information into the basis of the projections. Without that information it is still crystal ball gazing. And the facts at the moment do not show growth in our financial industry. They show a miserable future. Unless…….. And anything more said is crystal ball gazing.

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