Economy on the up, says ESO

| 01/08/2011

(CNS): Although many local business owners report still feeling the economic pinch, according to the latest statistics from the Economics and Statistics Office (ESO), the Cayman Islands’ economy recorded real growth in the first quarter of the 2011 calendar year. The growth achieved in the January to March quarter of 2011 on an annualized basis was 1.2% when compared to the same quarter in 2010. The 2011 first quarter growth of 1.2% also exceeds the 0.9% growth estimated for the entire 2011 calendar year. According to government officials, there were several positive results that contributed to the growth in the economy, such as company registrations and the increase in air arrivals.

The premier, who is also minister for finance, said he was “upbeat about the results”, which were published Friday, and was positive about the country’s economic future.

“I, along with the Government, am very upbeat with respect to the future performance of the economy – which is based not only on positive results achieved in the first quarter of 2011 but also on the partnerships and initiatives that the Government has forged with the private sector,” Bush stated, but did not detail the partnerships and initiatives he referred to.  “We are encouraged by the 2011 first quarter results and by the islands’ bright future prospects,” he added.

The report by the ESO states that new company registrations increased in the first quarter by 11.9%, air arrivals grew by 6.8%, cruise ship passengers increased by 8.2%, and the number of property transfers increased by 20.3% – which complemented a 271.2% increase in the value of properties transferred in the quarter that amounted to $253.9 million.

However, there were still several areas of the economy in decline. Building permits fell by 19.4% to settle at 179, valued at $61.1 million, the lowest level in five years. This is also the second straight year of decline. Merchandise imports fell by 1.6% to register at $169.2 million, but this was a lower decline than the 5.7% fall in the same quarter last year. Work permits also continued the decline. Following the drop of 13.6% last year, permits fell by a further 10.6% and there are now around 19,877 people on work permits.

Broad liquidity or money supply contracted by 7.6% due to reductions in both foreign currency deposits held by residents and CI dollar-denominated money.  The weighted average lending rate rose to 7.4% from 6.4%, although the prime lending rate remained stable at 3.25%. Domestic credit expanded by 2% as credit to the public sector increased by 32.4% while credit to the private sector fell marginally

While new company registrations were on the increase, the ESO revealed that mutual funds registration fell compared to the previous year by 117 or 1.2%. Bank and trust company registrations fell 8.6% and insurance licenses decreased by 5.4%.  The stock exchange listings also contracted by 10.6% to settle at 1,136, while stock market capitalization for mutual funds declined. 

Although, electricity consumption rose by 1.5% on account of increased commercial consumption, the ESO said that by contrast water consumption fell by 3.7%.

According to the ESO figures, the central government’s overall fiscal deficit narrowed to $9.9 million from $17.3 milliona year ago, but the total outstanding debt increased to $561.0 million from $508.7 million a year ago.

For more information on the Cayman Islands’ First Quarter Economic Report 2011 visit or see the report below.

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  1. Anonymous says:

    DId you know that 46.35% of statistics are made up on the spot!

  2. Anonymous says:

    It has been shown statistically worldwide that GDP declines as the price of electricity increases. I eagerly await the final figures for 2011 to see if Cayman is an exception to the rule. Of course if the increase in GDP does not happen as you project then you can always blame the high price of oil.


    Of most concern are the currently declining sectors of retail, wholesale, maintenance, utilities and employment. These are the "people" sectors. They tell the true story of the enduring life struggle many are and will face here.


    If statatics are correct and our GDP ends up shrinking instead of increasingas you project, then maybe you will tell the policy makers to make some changes and remove these ridiculous and damaging taxes on fuel. We like other countries are a fossil fuel based economy. Any policy or plan that makes fuel more expensive hurts the entire economy across the board. When you see it you will believe it.


  3. An Onymous says:

    Hmm, instead of the title being "Economy on the up,"  the two words in the middle could have been left out and five words added at the end so that it would read "Economy up the creek without a paddle"…

    "S.O.S! – S.O.S!" the people are crying out, "It's way past time to give up command captain Premier and be sure to take your whole crew with you so that the good ship Cayman will get one more chance to diligently search out and hire a full complement of upright and reliable crew while there is still some chance to turn away from the dangerous course plotted on the wrong map which you have been using for more than two years."  

    Listen, somewhere in the distance is a voice declaring, "You've been weighed in the balance and found wanting." 

  4. Anonymous says:

    Lies, damn lies and statistics.

  5. Anonymous says:

    What were the increases again? What i get from the article is:

    passengers on ships and planes increased as well as land transfers (don't know if this was mainly from Govt to DART)


    Less construction means economy contracting; Less imports and less work permits means less govt revenue; Less money supply means less spending and less jobs; Higher interest rates (even though Prime rate stayed same) means less spending and less jobs; Prime rate same while interest rates rise means Banks making even more profit but not paying more interest on savings;


    Exempted company registrations look like they fell but increase in new company registrations means more local companies registered – but how is this possible if there is less spending, higher interest rates, less work permits, less money supply and increasing Caymanian unemployment?


    What is encouraging about this scenario again Sir? That we have hit rock-bottom and it can only get better?

  6. Anonymous says:

    Dear ESO, your report is obviously put out as propoganda. You have left out one very important statistic which is employment figures. Employment is the most important indicator of growth or shrinkage in an economy. Since work permits are down I wll assume that those jobs were not filled by Caymanians which means our workforce has further declined.


    Sometimes it's not what you say that counts, it's what you don't say.


    • Anonymous says:

      I have no further data saying the local economy is getting better or worse, but employment numbers are generally considered a "trailing indicator".  Meaning there is a bit of a lag after things get worse before employment numbers go down and a bit of a lag after things begin to get better before employment numbers go up.  So employment isn't a good statisic if you are trying to get an early feeling for future economic trends.  Businesses tend to wait 6 to 18 months after things begin to get worse before they feel they must cut employees and tend to wait 6 to 18 months after things begin to get better before they begin to add employees.  Its a bit of a natural conservitive reaction.  On both sides business tends to have a slight "wait and see" approach before making staffing changes.


      • Anonymous says:

        Lagging or leading is irrelevant when comparing unemployment figures year over year. The last figure put out was about 6.7% as I recall. I am sure ESO maintains a current figure for comparison sake. It would be good to know if the first quarter of 2011 showed a change from the comparable period of 2010 just as a point of reference. Any differencescould easily be explained as you suggest with the lagging scenario. I also saw in your report the decrease in work permit holders. As was discussed earlier this year, it is assumed these jobs were for foreigners and that they had to leave when their jobs ceased. If they are no longer here, how do they get counted in the unemployment picture? Employment statistics apply to people while the number if jobs is exactly that, the number of jobs. The number of jobs in a country are not related to unemployment. To me, unemployed means having the ability and desire to work but not working.

        Economists and statisticians look at numbers like % increase in revenue and % decrease in cost overall to come up with a grand total that shows economic growth. But as this report shows, the sectors that matter to the economic condition of the general population are down. The purpose of economics is more than just an exercise in accounting, its' purpose is to assure that the financial and life needs of people are being met or bettered. In this case these needs are not being met. Costs to the already strained consumer are worsening as your report shows. Revenue to government is up by virture of investment activity and the financial services and banking industry but that obviously has not helped the average citizen realize a increase in their economic well-being.


  7. Anonymous says:

    The title should have said, "Government Revenue on the UP". Investment in the island is down, The money supply is contracting, stores are closing, work permits are down, the private sector which drives the economy is being clobbered by high electricity costs and other taxes and fees. This is unsustainable and will lead to our demise. We are living on credit now and when the bills come due…… can guess the rest.



  8. Anonymous says:

    Re: Accountability: Who is the Head/ Spokesman of ESO? Without a name, who cares|?

  9. Anonymous says:

    The increase in air arrivals was due to the Premier and the rest of his gang returning from trips abroad.

  10. Anonymous says:

    This government is obviously desperate to report some sign of good news.


  11. Anonymous says:

    eso like any other government entity…cannot not be trusted at this stage….

  12. CONFUSED says:

    How can the title of this article be 'Economy on the up' when almost every figure has decreased?.eg.. debt increased,..electricity price rose… work permits fell. As far as I can see out of the 20 areas listed… only 3 or 4 were actually proof of an economic improvement. Can someone explain how this counts as economy being on it's way up? Correct me if I'm wrong but the numbers listed don't exactly support this.

  13. Wet Paper Caymanian says:

    Air Arrivals and cruise ships passengers are up according to government officials ……… Difficult to accept their credibility at this time. Don't you think ?