INFLATION BITES BUT CAYMAN’S ECONOMY GROWS

As residents continue to grapple with the cost of living in Cayman, largely driven by external factors, the extent to which it is impacting household budgets is outlined in the latest report by the Economic and Statistics Office(ESO).

It records the average Annual Inflation Rate for 2023 increasing by 3.8 percent over 2022. “The average CPI in 2023 was 131.0, an overall increase of 3.8 per cent over the average CPI in 2022.”

This is mainly attributed to higher prices for household furnishings and equipment, food and non-alcoholic beverages, housing and utilities, clothing and footwear, alcoholic beverages and tobacco, and restaurants and hotels.

Specific to the fourth quarter of 2023, the inflation rate for that period alone was 3.6 per cent, driven mainly by an almost 10 per cent rise (a 9.3 per cent) in household equipment.

That category is broken down into a significant rise in the index for glassware, tableware and household utensils at 27.3 per cent. Other double-digit rises were noted in the repair of household appliances - 21 per cent, the cost of small electric household appliances went up by 19.2 per cent on average, and furniture and furnishings saw rice increases averaging 14.3 per cent.

Other notable increases were; an 8.8 per cent rise in non-durable household goods, 8.2 per cent increase in household textiles, a 2.2 increase in major household appliances and a 0.7 per cent increase in small tools and miscellaneous accessories.

The housing and utility division saw a cost increase of 5.9 per cent, transport was up by 4.1 per cent, and the education division up by 3.5 per cent.

According to the ESO, a comparison of the fourth quarter of 2023 with the third quarter of 2022 indicates that the CPI rose by 1.7 per cent, as the index for housing and utilities rose by 4.1 per cent, 1.4 per cent in housing equipment, communication increased by 1.2 per cent, while transport and miscellaneous goods and services each rose by 1.0 per cent.

Meanwhile, other economic indicators in the ESO report show that the Cayman Islands economy continued to grow in 2023.

“Available indicators suggest that the Cayman Islands’ gross domestic product (GDP) increased by an estimated 4.0% in real terms for the second quarter of 2023. This reflects an acceleration from the estimated growth of 3.2% in the first quarter.”

It further shows that indicators for the first two quarters of the year suggest that the economy expanded by 3.6% in the first six months compared to the growth of 3.5% estimated for the corresponding period a year ago.

According to the ESO, the economic expansion in the first half of the year largely reflected increased activities in the tourism sector, which supported growth in transport, utilities and other sectors.

“Strong demand for the islands’ tourism services continues to support the post-pandemic recovery, while higher interest rates and sustained borrowings support activities in financial services.”