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 1.4% in the first six months of 2021, largely driven by increased output in the construction (+13%), business activities(+4.5%), government services and real estate sectors; whereas the financing and insurance services sector, which remains the largest contributor to GDP, grew by an estimated 3.2%. Economic activity continued to be negatively impacted by the travel restrictions, which led to a significant decline in the tourism sector. Governmental figures show that the domestic economy is expected to accelerate by 5% in 2022 and an average of 3.2% per year in the period 2023-2025, although much will depend on the global economic situation.

The country’s public finances are healthy: the central government recorded an overall surplus of KYD 127.1 million in the first six months of the year, resulting from revenue of KYD 580.0 million and expenditure of KYD 452.9 million. The central government’s outstanding debt fell anew and settled at KYD 232.3 million as of June 2021, lower than the KYD 266.5 million recorded in June 2020. The average consumer price index inflation was estimated at 1.3% in 2021, albeit continued increases in international food and energy
prices are expected to add upward pressures on inflation in the short term (Economics and Statistics Office). The Cayman Island's economy is largely dominated by the services sector (86.3% of GDP), while industry and agriculture have minor shares (7.6% and 0.4%, respectively - World Bank 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 76,748 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. Given the increase in employment opportunities from planned construction projects, the unemployment rate was estimated at 5% of the labour force in 2021. It is expected to improve to 4.4% in 2022 and to an average of 3.6% in the following three years, according to the Economics and Statistics Office.

Monetary Indicators	2016	2017	2018	2019	2020
Cayman Island Dollars (KYD) - Average Annual Exchange Rate For 1 GHS	n/a	n/a	n/a	n/a	n/a

- Latest available data.

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Latest Update: February 2023