ECONOMY STRONG…BUT IS IT ‘TRICKLING DOWN’?

The numbers speak for themselves…but are they telling the whole story?

A recent flood of figures and reports from the Economic and Statistics Office(ESO) and the Office of the Auditor General paints a picture of economic growth in Cayman.

Compared to other ‘fairly well-to-do’ economies in the region such as the Bahamas and Bermuda, Cayman’s economy appears to be holding its own and showing signs of growth, notwithstanding some areas of concern over the management of economic processes.

In fact, Auditor General Sue Winspear says she is “pleased to note that the economy is performing well,” noting that it has done so consistently over the five years although some indicators were, unsurprisingly, affected by the COVID-19 pandemic.

An even more updated report from the ESO shows the post-pandemic recovery and growth trend continued during the first quarter of this year.

“Cayman’s economy continued to expand in the first quarter of 2024, with real GDP estimated to have expanded by an annualized rate of 3.6% in the first quarter,” it reports.

Yet, despite the topline figures painting an encouraging picture and positive outlook, somehow the ‘feel-good factor doesn’t appear to be trickling down - much less ‘flooding’ down - to the average Caymanian.

Principally, the cost of living continues to have a stifling effect on the personal finances of many Caymanians. Despite the official economic statistics, real-life reports and anecdotal information tend to tell a different story.

The cost of living is often pointed to as the real culprit. But according to the ESO, in the first quarter of 2024 global food prices generally eased, with wheat and maize prices reaching three-year lows. Consequently, food and non-alcoholic beverages inflation here moderated to 1.1% relative to 12.3% in 2023.

Its figures also point to inflation apparently trending downwards.

“Notably, Inflation rose to a high of 11.2% in the first quarter of 2022 and moderated to 6.6% in the first of 2023.”

Also interesting (and equally puzzling) is the indication that “the consumer price index (CPI) inflation rate for the quarter is slightly below expectations. Notwithstanding, the inflation projection for the year is maintained at 2.1% for the full year.”

And apparently, it’s not for the want of work. “The labour market remained robust for the first quarter of 2024, with demand from the public and private sectors increasing.”

On the surface then, a fairly rosy picture. But beneath the surface the picture doesn’t seem to be the same. Many Caymanians claim that they are having difficulties - some even struggling - to make ends meet.

Something doesn’t seem to be adding up.

We anticipate a flood of answers, analyses and solutions in the upcoming (or by now ongoing) election campaign.