Durrant Pate/Senior business journalist

Preliminary estimates show that the Cayman Islands’ economy expanded at an annualised rate of 2.9 per cent in the first quarter of 2025, with broad-based expansion supported by sustained demand across core service industries.

The performance is marginally behind the 3.6 per cent growth recorded in Q1 2024. Notable areas of growth included electricity and water supply (4.6 per cent), hotels and restaurants (4.5 per cent), business activities and administrative services (4.3 per cent), health and social services (4.7 per cent), and finance and insurance services (2.9 per cent). Key infrastructure sectors also posted gains, with wholesale and retail trade up 3.9 per cent and construction increasing by 2.3 per cent.

This performance reinforces a positive outlook, with real gross domestic product (GDP) projected to grow by 2.6 per cent for the year. The central government recorded an overall surplus of KY$244.8 million in the first three months of 2025, reflecting revenue of KY$554.1 million and expenditure of KY$309.3 million. Outstanding government debt declined to KY396.9 million as of March 2025, compared with KY$445.9 million in March 2024.

The Cayman Islands’ annual economic report, released by the Economics and Statistics Office (ESO), confirmed that the economy continued its growth streak in 2024. Real GDP expanded by 3.1 per cent to KY$5.21 billion, underpinned by expansion across all major sectors. Financial services, which account for over 30 per cent of GDP, recorded a solid 2.9 per cent increase, driven by strong demand and the jurisdiction’s growing role in global insurance markets.

The services sector remained the main driver of growth, accounting for 89.1 per cent of GDP and increasing by 2.9 per cent. Actual indicators pointed to robust expansion in construction (3.0 per cent), real estate (2.9 per cent), other services (3.1 per cent), wholesale and retail trade (3.7 per cent), and health and social work (3.0 per cent). Overall, the 2024 upturn signalled continued confidence in the Cayman Islands’ development and highlighted the economy’s integrated structure with complementary sectors supporting growth. 

The government ended the year with net borrowing of KY$6.5 million, as total revenue of KY$1.12 billion fell slightly below total expenditure of KY$1.13 billion. Despite this, the central government’s outstanding debt decreased to KY$405.2 million by the end of 2024, representing a 10.6 per cent reduction from the end of 2023