Cayman Islands: Economic Outline

Economic Indicators

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The Cayman Islands are an overseas territory of the United Kingdom. With no direct taxation, the islands are a thriving offshore financial centre. Over the last twenty years, the Cayman Islands have experienced rapid growth in almost all sectors, especially in banking, insurance and offshore management, as well as tourism, financial and insurance services. According to the Economics and Statistics Office (ESO), economic activity in the Cayman Islands was estimated to have increased by 3.8% in the first quarter of 2022, largely driven by growth in tourism and transport-related sectors: the hospitality industry, comprising hotels and restaurants, experienced a growth of approximately 27.8%. Meanwhile, the transport and communication sector expanded by roughly 14.3%, and the 'other services' sector showed a noteworthy increase of 9.1%. The financing and insurance services sector, which remains the largest contributor to GDP, saw a growth of approximately 2.5% for the quarter.

The country’s public finances are healthy: the central government recorded an overall surplus of USD 215.9 million in the first three months of 2022, resulting from revenue of USD 446.9 million and expenditure of USD 231 million. The central government’s outstanding debt fell anew and settled at USD 218 million as of March 2022, lower than the USD 243.9 million recorded one year earlier. The average consumer price index inflation was estimated at 9.5% in 2022 (from 1.3% one year earlier), driven mainly by higher prices for housing and utilities. The Cayman Islands economy is largely dominated by the services sector (86.9% of GDP), while industry and agriculture have minor shares (8% and 0.4%, respectively - World Bank's latest data available). Tourism accounts for a considerable part of GDP and about three-quarters of foreign currency earnings. The financial and insurance services sector is estimated to account for almost one-third of GDP, which correlates with the presence of 85% of the world's hedge funds and over 11,000 mutual funds registered in the country (the Cayman Islands is among the most sophisticated and performing offshore centres in the world). In recent years, the government has reaffirmed its commitment to improving transparency and good governance as well as the fight against tax evasion and money laundering by adopting a framework for fiscal responsibility (FFR).
 
The residents of the Cayman Islands enjoy a high standard of living (the GDP per capita PPP is estimated at USD 74,155 by the World Bank), but despite the high cost of living the country does not operate a state-funded welfare system for its citizens. That said, the archipelago enjoys social stability and racial harmony, very little crime and a stable level of unemployment. Data from the Economics and Statistics Office show that the unemployment rate stood at 2.1% in the second half of 2022. Compared to one year earlier, the total labour force increased by 18.3% to reach 57,582 persons.

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- Latest available data.

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Latest Update: November 2023