OFFICIAL REPORTS TRACK ECONOMIC GROWTH, DEVELOPMENT, AND QUALITY OF LIFE

A series of reports by the Office of the Auditor General(OAG) and the Economic and Statics Office(ESO) into the performance and management of the local economy as well as quality of life, has focused attention on what underpins Cayman society, the challenges and opportunities ahead.

The overlap across these reports is striking.

QUALITY OF LIFE

In what it describes as a first attempt at a Quality of Life Report, the ESO explains that it offers an initial look at the changing relationship between wealth, prosperity and quality of life as a measurable concept.

Based on a simple random survey of 2,000 households across all districts, the agency said its findings “provide a narrative of how the people of the Cayman Islands are reconsidering their priorities and redefining the meaning of a good quality of life”.

According to that survey, 69.5 per cent of people were appreciative of the overall development of the Cayman Islands. This metric was highest among non-Caymanians (76.5%) and lowest among Caymanians (61.5%).

Cross-referenced with another recently published ESO report, the First Quarter Economic Report 2024 confirms the upward economic trajectory especially post-pandemic. However, the degree to which this is filtering throughout the economy remains a topic of debate.

ECONOMIC PERFORMANCE HIGHLIGHTS

ESO data shows that 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 per cent in the first quarter compared to 3.4 per cent for the same period last year.

“The economic performance largely reflected a continued recovery in tourism-related services, which induced growth in auxiliary sectors. The finance and insurance sector also showed increased economic activity for the period,” the ESO said.

According to the ESO, the unemployment rate for the year is maintained at 2.9 per cent, and it further states that the demand for labour is expected to remain strong, in line with the continued growth in economic activities.

“The labour market remained robust for the first quarter of 2024, with demand from the public and private sectors increasing.”

On the significant metrics of inflation and the cost of living, the ESO reported 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 per cent for the full year. The forecast is maintained in the context of continued risks around geopolitical tension globally, albeit in an expected lower interest rate environment.”

Inflation slowed for the quarter, reflecting a continuation of the moderating trend observed in 2023. Notably, by comparison, inflation rose to a high of 11.2 per cent in the first quarter of 2022 and moderated to 6.6 per cent in the first quarter of 2023.

ECONOMIC MANAGEMENT

In its own review titled ‘The Government’s Approach To Sustainable Economic Development’, the Office of the Auditor General (OAG) observed that “the Cayman Islands economy is performing well but the cost of living is high.”

It also noted that successive Governments have set clear priorities for economic growth and diversification but there is no overarching economic development strategy or clear plans to diversify the economy.

DISTINCTIONS

Important distinctions are made between economic development, economic growth and quality of life categories.

The ESO explains that “economic development and growth are often synonymous, but that is not always true. They are, in essence, different. Economic development focuses on the standard of living and includes qualitative and quantitative measures.”

It adds that economic development aims to foster an economy where members benefit from wealth and education, health, and prosperity, making economic development a multidimensional economic tool.

In contrast, economic growth focuses on the increase in an economy’s output from one period to another. It solely considers opportunities to stimulate growth within an economy to increase real GDP. Additionally, economic development focuses on providing programs, policies, or activities to improve a community’s economic well-being and quality of life. Depending on the community, it has a different meaning, as each community has opportunities, challenges, and priorities.

Regarding quality of life, it says, “Quality of life (QOL) is broader than economic production and living standards. Quality of life refers to individuals’ overall satisfaction and well-being. This concept is shaped by physical, psychological, social, and environmental factors. A high quality of life makes individuals feel happier, healthier, and more fulfilled.”