This is what an investment-grade country's budget looks like
Wednesday, September 06 2017 @ 11:11 AM AST
Contributed by: AleemKhan
As Trinidad & Tobago prepares for another deficit budget - third in a row - seeing what's possible by looking at what the Cayman Islands accomplishes with fewer natural resources, means watching these tiny islands CONTRIBUTING TO, rather than spending from, the mainland UK's budget, rendering vacuous the argument that it's success is due to its British territory status.
"Gross domestic product (GDP) expanded anew in 2016 at an estimated rate of 2.7 percent, marginally lower than the 2.8 percent growth recorded in 2015," the Economic and Statistics Office of the Cayman Islands said in its Annual Economic Report 2016.
The ESO said: "Growth was indicated in all sectors led by electricity and water supply; real estate, renting and business activities including legal and accounting services; construction; agriculture and fishing; and manufacturing. Nominal GDP per capita income was estimated at $47,864, lower relative to the $48,167 recorded for 2015. A higher population pulled down the nominal per capita income in 2016. The average inflation rate in 2016 was -0.6 percent, compared to -2.3 percent a year ago. The deflation resulted mainly from the continued impact of the downtrend in global oil prices. Total employment increased by 3.3 percent to 40,411 from a year ago. The growth in employment coupled with a similar growth in the labour force kept the unemployment rate stable at 4.2 percent in 2016. The unemployment rate among Caymanians was estimated at 7.1 percent. In 2016, merchandise imports grew by 2.8 percent to reach $854.2 million, backed by a 5.1 percent increase in non-oil imports as oil-related imports declined by 14.3 percent. Money supply (M2) expanded by 4.4 percent to register at $6.2 billion in 2016. This monetary expansion was due mainly to a 10.2 percent increase in local currency deposits, augmented by a 2.6 percent growth in foreign currency- denominated deposits. Domestic credit from commercial banks grew by $102.7 million (or 3.4%) to settle at $3,083.9 million. Credit to the private sector increased by 4.6 percent while that to the public sector contracted by 7.3 percent. The increase in private sector credit was mainly for the business sector’s general business activity and households’ domestic property. There were no new borrowings by the public sector."
The ESO also said:
* Registration indicators for the financial services industry show a weak overall performance with only insurance services showing marginal growth of 0.4 percent, while all other services declined at varying degrees.
* In 2016, total visitors to the Cayman Islands declined marginally to total 2.1 million. This decrease was due to a reduction of 0.3 percent in cruise passengers while stay-over arrivals remained relatively unchanged.
* Building intention indicators were mixed in 2016. The value of building permits in Grand Cayman rose by 32.1 percent to $247.0 million mainly reflecting higher outturns in the apartment and commercial categories. On the other hand, the value of planning approvals in Grand Cayman decreased by 11.4 percent to $406.7 million. Approvals in the Sister Islands grew by 19.7 percent to $7.3 million.
* Real estate activity increased during the year as the total value of property transfers grew by 40.5 percent to $860.3 million, due solely to freehold transfers as leasehold transfers declined in value
* The central government’s overall surplus in 2016 reached $101.0 million (3.4% of GDP) compared with $116.3 million (4.1% of GDP) in 2015. The lower surplus resulted from a higher increase in expenditure (8.6%) relative to the rise in revenue (4.9%).
* The central government’s total outstanding debt continued to decline, settling at $483.9 million (16.5 percent of GDP) by the end of 2016, lower by $27.1 million compared to the level at end 2015.
* GDP is projected to grow in 2017 by 2.3 percent, due to expected growth in the construction of private and public sector projects, an expected recovery in tourism-related services as well as stable growth in financing and insurance. The inflation rate is expected at 1.8 percent arising principally from external pressures. The overall unemployment rate is projected to remain stable at 4.2 percent.