RBC: Cayman Islands economy grew by an estimated 3% in 2016
Tuesday, April 11 2017 @ 02:53 PM AST
Contributed by: AleemKhan
Cayman Islands — Growth estimated at 2.5% in Q3 2016
The Economics and Statistics Office (ESO) estimates growth in Q3 2016 at 2.5% y/y, bringing annualized growth for Jan-Sept 2016 to 2.8% y/y, and has therefore maintained its 3% growth forecast for 2016. The number of work permits in issue declined by 1.3% q/q to 23,104 in Q3 2016—the first q/q decline since Q4 2013. Net foreign assets of the Monetary Authority stood at KYD115.4 million in Q3 2016, which we estimate at roughly 1.8 months of merchandise imports—admittedly a measure with limited relevance in this heavily dollarized economy, especially since net foreign assets of the commercial banks stood at KYD3.689 billion in Q3 2016. Inflation reached 0.6% y/y in Q4 2016, ESO data show. The fiscal surplus widened for the fourth consecutive year, by 7% y/y in Q3 2016 to KYD112.5 million. As such, government debt continued to decline, by 3.8% y/y to KYD498.7 million in Q3 2016.
Moody’s therefore maintained its Aa3 rating and stable outlook, citing improving debt metrics, a strong institutional framework, and fiscal surpluses expected to average 1.8% of GDP in 2017-2018. CTO reported no change in the level of stopover arrivals in 2016, but a 3.5% y/y decline in January 2017, based on fewer visitors from the USA, Canada and Europe. Cruise passenger arrivals also fell, by 7.7% y/y in January 2017.