Cayman economy contracted by 11.4% in first half of 2020
/ Our Today
administrator
Latest economic data coming out of the Cayman Islands points to an 11.4 per cent contraction in the economy in the first six months of last year.
The country’s Economic and Statistics Office estimates the economy contracted by 7.8 per cent during the full period of 2020, but projects economic activity will expand by 5.2 per cent in 2021.
The data showed that there was a 1.9 per cent expansion in the first quarter of 2020 but thereafter the economy dropped at an annualised rate of 18.7 per cent in the second quarter of 2020.
The Economic and Statistics Office’s semi-annual economic report shows that COVID-19-related lockdown measures and border closures impacted the hotels and restaurant sector the most, which contracted by 52.3 per cent followed by contractions in construction of 19.7 per cent and wholesale and retail trade, down 16.5 per cent.
The financial sector, which is the largest contributor to Cayman’s economy, declined by an estimated 3.3 per cent during the period.
Despite the sharp contraction of almost all sectors, health and social services is estimated to have expanded by 18.1 per cent. This came as spending and activities in the sector increased in preparation for the government’s pandemic-mitigation response.
Expansion in government services
Producers of government services, which include the education sector is estimated to have expanded by 9.3 per cent during the period. The Economic and Statistics Office reports that the number of work permits declined by almost 4,500 between the third quarter of 2019 (28,750) and the second quarter of 2020 (24,638).
The second half of last year is expected to show a broader-based recovery, with early indicators pointing to a jump in activity in construction, real estate and financial services.
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