Cayman's Outlook 2024

Current Leadership

In December 2023, in the first policy speech of the new Government lead by recently installed Premier Julianna O'Connor-Connolly, it was announced that there would be motions to finance a range of infrastructure projects, to be paid for by borrowing a further $150 million and the implementation of tax and fee increases. These measures are expected to culminate in around half a billion dollars of government debt by the start of 2026.

The key element of the government's spending plan is a considerable school building programme, which will include the construction of two new high schools, one in Cayman Brac and the other in West Bay, as well as new classrooms at the Lighthouse School, and the next phase of redevelopment of the John Gray High School. Additionally, the government plans to continue investing in upgrading the road network, parks, and prison facilities.

To finance these ambitious projects, along with borrowing, the intention is to raise revenue through a variety of measures. These would include an increase in stamp duty for "high end" property in certain geographical areas, though it would require new legislation to be passed by Parliament to initiate.

In addition to stamp duty, the government also announced increases in work permit application fees, immigration-related visas and extensions, and administrative and regulatory fees charged by various government agencies.

After these announcements, the greatest challenge the Government faces is balancing its development aspirations with the need to stay within metered framework of fiscal responsibility.

The proposed new Infrastructure spending earmarks are:

Environmental Stewardship:
- Acquiring land for farming and conservation: $7.6 million
- Using funds from the Environmental Protection Fund to purchase land for recreation or conservation, including beaches: $10 million

Community Development and Safety:
- Investing in prison facilities: $11.6 million

Public Spaces and Recreational Facilities:
- Central Scranton Park project and upgrades to other parks and jetties: $20.4 million

Road Infrastructure:
- Expanding and maintaining the road network: $28.6 million

Education:
- Expanding school facilities: $65.8 million

Draft National Development Plan 2024

The Planning Statement serves as a comprehensive guide for development within the Cayman Islands, adhering to the Development and Planning Act (2021 Revision). This document establishes a long-range plan to govern physical development and overall land use across the Islands.

The Development and Planning Law of 1971 established the Central Planning Authority (CPA) to create and implement development plans, leading to the first National Development Plan in 1977. Recognising the need for an update, a Development Plan Review Committee was formed in 1991, and after public consultations and tribunal hearings, the 1997 Development Plan was approved by the Legislative Assembly, now known as Parliament. Notably though, the 1997 iteration only included appendices offering development control guidelines for the Sister Islands. Consequently, a dedicated plan for Cayman Brac and Little Cayman has yet to be established. The new plan will therefore include guidance for all three Islands.

While there have been previous attempts at modernisation, the 1997 Plan still remains the guiding document for physical development on Grand Cayman. However, with a population considerably more than double that of 28 years ago and infrastructure showing signs of buckling under the weight, the current Government's assumed objective is now to reign in overdevelopment and "achieve the best balance of economic, social, and environmental outcomes, while protecting the culture, health, and general welfare of the people". Many would agree that this is long overdue.

Therefore, in May of 2024, the CI Government released a draft document for public feedback that could serve as the foundation for the first new national development plan in 28 years. Over the next few months there will be a series of public forums across the Islands to discuss the virtues and limitations of the plan. The Development Control Board (DCB) is actively collaborating with the CPA in the preparation of this plan, known as 'Plan Cayman'.

You can submit your feedback on the policy online here at www.plancayman.ky

Financial Sector Overview

The Cayman Islands has successfully been removed from the Financial Action Task Force's (FATF) money laundering 'grey list' after over two years of dedicated efforts. This achievement, announced on October 27th 2023, follows a meeting of the FATF Plenary in Paris. The 'grey list' designates nations actively addressing deficiencies in anti-money laundering, terrorist financing, and proliferation financing measures. To meet global standards, the Cayman Islands established a new police unit, enacted legislative changes, and implemented new standards for realtors and precious metal dealers. This removal is significant for the islands' financial services industry and affirms their commitment to combating financial crimes and ultimately should pave the way for further foreign investment. Whether there'll be a knock on effect that benefits the Islands' local economy remains to be seen, though this certainly bodes well for the future growth of the finance sector in the Islands. As of December 2023, the jurisdiction is now undergoing removal from additional entities' listings associated with AML/CFT/CPF policies. The Government has already received notification of the Cayman Islands' removal from the UK's anti-money laundering high-risk list on December 5th 2023, and the EU Commission's issuance of a delegated regulation, specifically addressing the delisting of the Cayman Islands from its AML black-list.

Below is a retrospective look at the diverse facets of the Cayman Islands economic landscape including finance, population, workforce and salaries, based on information provided by the Economics and Statistics Office and the recently published Cayman Islands Government Strategic Policy Document 2023-2026. We also look at what lies ahead for the education sector, climate sustainability, tourism, real estate, healthcare, transport and more.

Population & Permits

According to the spring 2024 Labour Force Survey carried out by the Economics and Statistics Office (ESO), the results of which became available in September 2024, the population and permits stats at a glance for the Cayman Islands are as follows.

• Estimated population of the Cayman Islands as of June 2024: 87,866. This is an over 5% increase from 2023 (around 3,000 more people since December 2023)
• Caymanian population rose by 2.5% to 39,897
• Permanent residents increased to 7,822 from 6,433 (spring 2023). Which translates to just under 9% of the population
• Non-Caymanian population is more than 40,000 (4.8% increase from 2023). The growth in this area of the population is driven by migrant workers, not birth rate
• 53% of the workforce (33,573 people) are expatriates
• Divided by sex, the population is made up of Men: 44,936 (6.3% increase since last spring) and Women: 42,930 (3.7% increase since last spring)
• Children under 15: 14.6%
• People over 65: 8.1%
• Dependent population (under 15 and over 65): 22.7%
• Non-Caymanians make up over 54% of the total population. Caymanians make up the remainder.

It is important to note that population growth is not inherently negative. It can lead to economic growth and increased diversity. However, some Caymanians are concerned, quite rightly, that the rapid population growth is diluting Caymanian culture and identity as well as straining resources and infrastructure beyond their limits.

That being said, the Government faces pressure from the private sector to continue to allow high levels of immigration in order to maintain the Islands' competitive advantage in the global economy, in addition to the considerable fees that the Government collects on permits and other similar applications. Any future government will need to balance the needs of the economy with the concerns of Caymanians and permanent residents, about the impact of population growth on their quality of life.

Current State of the Local Economy

The local economy's current state, and how consumers are being affected is indicated in the Consumer Price Index (CPI) report for Q1 2024, published on the 21st May 2024. There have been considerable increases in housing, utility and food costs since last year. But not as severe as those consumers experienced from 2022-2023. (Figures from ESO). The full report is available here. The CI Consumer Price Index Report

In the first quarter of 2024, the CPI was 132.5 representing a 1.5% increase compared to the same quarter in 2023.

Notable changes in specific categories:

• Food & Non-Alcoholic Beverages: up 1.1%
• Alcoholic Beverages and Tobacco: up 0.1%
• Clothing and Footwear: up 1.9%
• Housing and Utilities: up 2.6%
• Household Furnishings, & Maintenance: up 3.5%
• Health: up 2.5%
• Communication: up 7.4%
• Recreation and Culture: up 2.4%
• Education: up 7.9 %
• Miscellaneous Goods and Services: up 1.2%
• Transport: down 2.7%
• Restaurants and Hotels: down 1.9%

The CPI increase from Q4 2023 to Q1 2024 is nominal.

Salaries, Pay and the Workforce

According to the latest data from the Economics and Statistics Office, the Q4 2023 Labour Force Survey Report reveals insights into employment in the Cayman Islands.

The overall unemployment rate in October 2023 was 3.3%, with the unemployment rate for Caymanians rising slightly to 5% compared to 2022. This equates to over 1,100 unemployed Caymanians. The workforce has grown to over 61,000 individuals, including about 21,600 Caymanians. 6% of the workforce is under 24 years old, of which only about half are actually working. The latter being a concerning statistic that speaks to this segment being either underqualified, unwilling or unable to find suitable employment.

Among employed Caymanians, nearly 20% are professionals, over 19% are technicians and associate professionals, and 16.2% are managers. Expatriate workers predominantly fill roles in service, sales, and craft-related trades, accounting for over 40% in these areas, with only 17% in professional roles. This should come as good news to pro-Caymanian activists, as it demonstrates that expatriates do tend to fill the jobs in the market that Caymanians prefer not to do.

Unfortunately, more than 20,700 workers earn less than $2,400 each month and about half of the workforce earns less than CI$3,600. Given the cost-of-living in Cayman, it is remarkable that many of this demographic of expats can afford to live here at all, but somehow they manage.

Financial Outlook for the Government 2024

The Government has reported a reasonably solid financial performance so far (Q2) in 2024.

Summary

Net Assets of the Government were $2.4 billion, with overall bank account balances of $584.0 million in cash and deposits. In general, the surplus is higher than was budgeted. This was primarily due to higher revenues, a positive variance of $15.7 million, and by lower levels of expenditure in personnel costs, a positive variance of $22.0 million, and supplies and consumables, a positive variance of $10.6 million. As a caveat, current savings in expenses may not translate into full year savings due to timing differences.

Compared to the same period in 2023, the total revenues of core government have increased by $58.6 million. Additionally, the total expenses have risen by $21.4 million.

Overall net surplus for the entire public sector increased by $50.2 million when compared to the results through the Second Quarter of 2023.

The operating cash and deposits were $392.5 million and reserves were $191.5 million, for that total balance of $584.0 million in the bank. (All amounts in CI dollars.)

A full unaudited report on the CI Government's finances for Q2 2024 can be found here.

Education

In the context of the Cayman Islands' educational landscape, in 2022, 4,515 children were enrolled in primary education and 4,527 in secondary education, with approximately 770 teachers serving in these institutions. There were slightly more students enrolled in government schools, as opposed to private ones. The government of the Cayman Islands allocated a budget of roughly $110 million for education during that year. High school graduation rates in the Cayman Islands stood at approximately 85%.

As part of the government's Strategic Policy for 2024-2026, there is a focus on equipping students for a digital future and fostering future leaders through nation-building activities. Key initiatives in this policy include strengthening early education programmes, reintroducing 'A levels' education in public high schools, and offering free tertiary education at local universities, all aimed at improving the education landscape and preparing students for the evolving demands of the modern world.

Broadly speaking, there are several ongoing projects at the moment in the Education sector, at various stages of execution, it is not known if all of these projects will come to fruition, but in December of 2023, the newly formed UPM Government proposed a $65.8M increase in funding for the Education Ministry over the next two years, to finance the various projects.

• The John Gray High School reconstruction including expansion of the Cayman Islands Further Education Centre campus and the construction of new sports fields
• Plans for a new high school in Cayman Brac and West Bay
• Increased capacity of Clifton Hunter High School with a fourth academy
• Lighthouse School expansion to provide both education and therapy for children with special needs
• Edna Moyle Primary School project aims to construct a new facility in North Side to better accommodate its educational needs
• Sunrise facility project seeks to establish a new facility offering improved services specifically designed for adults with disabilities

In the private sector, CF School is a new private high school that is expected to open in September 2025. It will be located in Buttonwood Park, George Town. CF School will offer a curriculum that is tailored to the needs of each individual student. The school will also offer a variety of extracurricular activities, including sports, arts, and music.

A new Montessori preschool, located on Captain Reginald Parsons Drive is planned for construction in West Bay, Grand Cayman, on a 5.25-acre plot. The $1.1 million project will be built in two stages, with the first stage featuring four classrooms, a drop-off lane, and a petting area, while the second stage will add four more classrooms, a playground, and a sports field. The preschool will cater to children aged 18 months to 6 years, employing the Montessori method for hands-on learning at their own pace, with a focus on environmental education and sustainability. The anticipated opening date is September 2024.

Climate Sustainability, Green Goals & Beach Erosion

The Cayman Islands Government has established ambitious national energy goals, aiming for 70% renewable energy by 2037, a 30% improvement in energy efficiency by 2030, and transitioning to 100% sales of electric vehicles by 2037. To realize these targets, the government is actively engaged in several initiatives. This includes investing in renewable energy projects such as solar and wind farms, promoting energy efficiency through public awareness campaigns and incentive programmes, and facilitating the shift to electric vehicles by offering incentives for purchases and establishing a comprehensive charging infrastructure across the Cayman Islands. These efforts collectively reflect the government's commitment to a sustainable and energy-efficient future.

Cayman's Landfill Sites

In 2022, the waste collected from commercial and residential locations reached a record high of 83,590 tonnes. At Cayman's three landfill sites, only 407 out of 154,590 tonnes of total waste were incinerated. This amount reflected an increase of 17,512 tonnes of created waste from the previous year, but more worryingly a four-fold increase compared to 2012. The Department of Environmental Health also shipped out 11,300 gallons of hazardous waste in 2022. Given these numbers, it becomes clear why ReGen, the project which is integral to the waste-to-energy plant and recycling infrastructure essential for establishing a eco-friendly solid waste management system in the Cayman Islands, must move forward. Unfortunately in July of 2024, negotiations on the construction and management off the project broke down permanently, and currently, ReGen seems dead in the water.

In Cayman Brac, a new, replacement commercial waste incinerator became operable in June 2024, 4 years after the previous one reached the end of its operational life. According to Government, the 'state-of-the-art' incinerator is designed to safely dispose of hazardous and biohazardous waste, whilst minimising emissions. It will serve both Cayman Brac and Little Cayman.

Beach Erosion

The problem of erosion along Seven Mile Beach is nothing new and each storm serves to further erode the beaches around properties built too close to the sea. The Cayman Islands Government has embarked on a proposed $21 million sand replenishment scheme as rising sea levels and over-development and too many hard structures on the beach fuel erosion. Following Hurricane Ian in September 2022, at the Grand Cayman Marriott Resort, the problem of the near-permanent absence of the hotel’s beach was made even worse by a new headache: flooding across the bar and restaurant areas. Significantly, the Marriott have since changed their name removing the word ‘beach’.

Tourism

The Cayman Islands' tourism sector is making a strong comeback, nearly reaching pre-pandemic visitor levels.

2023 In Review

In the first half of 2023, tourism taxes brought in CI$28.8 million, surpassing the mid-year budget projection by CI$12.4 million. During this time, 235,370 stayover guests visited the islands. The majority, around 83.6%, came from the United States, while 7.5% were from Canada, and 4.4% from Europe.

According to recently published DOT statistics, cruise ship passenger arrivals topped one million up to the end of November 2023, indicating a promising recovery in the tourism industry, but while cruise ship visitor numbers are far from pre-pandemic levels, about 70% of 2019's visitors, the upsurge in stayover guests aligns with the government's long-term policy. A year on year comparison to 2019's stayover visitors can be seen in the graph below:

Focus Pivots to Stayover Guests in 2024 and Beyond

Stayover tourism in the Cayman Islands is growing steeply post-pandemic but not quite to the ecstatic highs of 2019. With hopes that increased hotel room availability will support this trend, The Department of Tourism is now reporting over 8,060 rooms currently bookable for stayover visitors in mid 2024, a number bolstered by the recent opening of the Hotel Indigo just north of the midway point on Seven Mile Beach. Furthermore, the construction of another 600 hotel rooms in prime southern Seven Mile Beach spots is well underway. This increase will be coupled with an anticipated rise in Airbnb listings.

To service the potential increase in visitors flying in, particularly on long-haul flights, plans to enlarge and improve Owen Roberts International Airport continue apace, (although that speed is relative, when one considers 'Island-time'!) In fact, the CI Government is actively pursuing avenues to increase capacity on all three of the Islands' airports. However, not without some controversy. As of June 2024, the Government is inviting bids from private entities to carry out the Environmental Impact Assessments needed in order to proceed. It would seem, not surprisingly, that each of the planning proposals for the airports, championed by Tourism minister Kenneth Bryan MP, potentially come with the risk of upsetting the wildlife habitats and other current residents of the surrounding areas.

The most contentious of the three proposals is the relocation of the airfield on Little Cayman. The CIAA has decided to relocate the airfield to the Island's centre and this plan has been met with strong opposition from residents, who are concerned that moving the airfield will jeopardise the Island's complex wildlife ecosystem. Meanwhile at Owen Roberts International Airport, the expansion project entails extending the runway by 340 meters and adding a 240-meter safety zone into the North Sound, much to the chagrin of nearby property owners, not to mention the odd plant, bird and fish. Finally, it is feared on Cayman Brac, that the requirement to widen the runway by 75 meters will intrude upon the wetlands on its southern side.

Aviation Stats for 2024 at a glance:

• International inbound airline capacity was 490,738 seats on 2,955 flights up to mid 2024

• Nonstop service was scheduled from 8 countries and 26 gateways on 10 airlines

• Inbound airline seats to the US, UK and Canada accounted for 87% (425,870) of the total

• Inbound airline seat capacity increased by 15% on 365 more flights compared to 2023

What's Next for Cruise Ships?

At the same time, cruise ship passenger numbers have yet to recover to pre-pandemic highs, although other factors are at play in the cruise ship industry over and above the visitor product that Grand Cayman offers. In the first quarter of 2024, there were just over 400k cruise ship passenger arrivals, as opposed to over 635K in the same period of 2019.

Concurrently, the debate over the construction of cruise ship birthing facilities in George town continues to rumble away. With cruise ships getting larger and Cayman's ability to accommodate them, logistically-speaking, in question, some very hard choices will need to made over the next few years as to whether the Cayman Islands should move away from cruise tourism altogether. In which case, leaders will have to carefully construct an economic alternative for generations of Caymanian business owners and their ex-pat employees, who have depended on the cruise sector for decades.

It was announced by the Government in August of 2024 that a public referendum would be held "by the end of the year" regarding the construction of a new cruise ship berthing facility in George Town.

Cruise ship stats for 2024 at a glance:

• Cruise passenger arrivals for January to June 2024 were 634,212, down 14.6% or 108,341 persons compared to the same period in 2023

• There were 197 cruise ship calls, down by 50 calls compared to the same period in 2023.

2024 - Cayman Islands Tourism Industry First 6 Months Performance

(Stayover Guests)

• The Cayman Islands welcomed 250,699 stay-over visitors from January to June 2024

• The number of visits by stay-over visitors increased by 6.5% compared to the same period in 2023

(Peak in March 2024 with 57,040)

• Visitors stayed an average of 6 nights in the destination

• 45% of individuals were between 36 and 60 years old, with an average age of 42.9 years.

• The top three countries for visitation were the United States (210,712), Canada (17,186),

and the United Kingdom (7,120)

• Most common purpose of visit: Leisure, with 220,365 persons accounting for 87.9%

of the total stayover visitation.

• Business-related travel, which accounted for 6.2% of total visitation, increased by

10% to 15,543 persons.

• There were 14,791 persons visiting relatives, 5.9% of total visitation

Cayman Airways

The national carrier of the Cayman Islands also flies non-stop to the following international destinations:

(US)
Miami, New York, Tampa, Denver and Los Angeles

(Caribbean)
Cuba, Jamaica, Honduras, Panama. Current Barbados flight will end permanently in July 2024

Other Industries

Healthcare

In 2023, the healthcare landscape of the Cayman Islands experienced significant transformations in both the public and private sectors. Publicly, the Health Services Authority (HSA) expanded its healthcare services substantially. The Smith Road Medical Centre saw extensive growth, accommodating various new clinics, including Cardiology, Pharmacy, General Practice, and Public Health facilities. The HSA introduced specialised services and extended clinic hours, and significantly opened a new Urgent Care walk-in clinic improving response times with six additional ambulances.

The HSA also expanded services to West Bay with a dialysis unit, improving access for patients. Furthermore, the Cayman Islands Molecular Biology Laboratory (CIMBL) was established, offering local diagnostic genome sequencing, reducing the need to send samples overseas. A telemedicine robot was introduced at the Little Cayman Clinic, enhancing remote consultations. HSA also initiated a significant green initiative, investing in energy-efficient upgrades to reduce their carbon footprint.

Mental health services expanded with Alex's Place, a hub for children and adolescents, and the Poinciana Residential Mental Health Facility in East End.

Health City Cayman Islands is currently building a new $100 million facility in Camana Bay. This new centralised healthcare hub will feature a specialised cancer care centre, neonatal intensive care unit, emergency pavilion, critical care unit, and an expanded range of services. The hospital's new Radiation Oncology Centre began treating patients in May 2023. The facility will be the first in the region to offer unique services such as bone marrow transplantation and CAR-T cell therapy. A full opening is expected in late 2024.

Nearby, Dart has submitted plans to establish a new centre of health and wellness near the Health City Cayman Islands medical campus. The purpose-built three-story structure, scheduled to open in 2026, aims to create a convenient environment for health and wellness services by bringing various experts under one roof. The goal is to meet local healthcare needs, aiming to enhance accessibility for residents and tourists. The Centre, positioned near George Town and Seven Mile Beach, will include amenities like a cafe and wellness offerings, forming a healthcare hub alongside the new Health City facility.

Click here for information, news and listings from the Healthcare industry in Cayman

Real Estate

The Cayman Islands real estate market is currently experiencing a slowdown due to global factors like inflation and rising interest rates. However, it remains strong if not a little stagnant, with property values holding steady. In September of 2023 the Stamp Duty tariffs were favourably amended for first and second time Caymanian buyers, details of which can be found below, to try and kickstart the market a little. New developments that are imminent are contributing to the market's resilience and building costs are becoming more reasonable, however, challenges still exist and there is growing concern that the Cayman Islands Government have no clear long-term development plan. The future of Cayman real estate still looks very promising as it adjusts to current conditions and anticipates future growth.

The Government is also poised in 2024 to announce a 10-year strategic plan on how it intends to create affordable housing for lower income Caymanians. With, according to the Economics and Statistics Office, more than half of the homes on-Island in 2022 being rented accommodation (17,691 properties out of 34,133), this will be welcome news for many. Incidentally, of the remaining households, 8,267 were owned without a mortgage and out of all the households Islands-wide, only just over 50% had property insurance.

Click here for more on Cayman's Real Estate Market

Click here for more on Stamp Duty Concessions for Caymanian Buyers

Transport

As of August 2023, the Cayman Islands are actively addressing traffic issues due to the rapid growth in the number of vehicles on the roads. The government is working on many road projects, including expanding the Linford Pierson Highway, realigning Crewe Road, and enhancing the King's Sports Centre roundabout. Additionally, a study on the Grand Harbour roundabout is in progress as this location is commonly acknowledged to be the bottleneck that is causing the two-hour commute for those living out East. Projects for 2024 include the Godfrey Nixon Way extension, an Airport Connector Road, and the East-West Arterial widening.

The number of vehicles on Cayman's roads has been increasing rapidly, with thousands of cars imported annually and a significant rise in active licenses and vehicles by the end of 2022. The Government has pledged to improve public transportation and continues to address the Island’s infrastructure.

Public Bus System
In April 2023, Deloitte released a comprehensive report evaluating the Cayman Islands' public bus system, noting its current state as "fragmented, inefficient, and unsustainable," and failing to meet the community's needs. The report, commissioned by the Ministry of Tourism and Transport, proposes several key recommendations. These include replacing the private bus service with a Government-operated network to enhance operational efficiency, investing in new buses and infrastructure to improve reliability and comfort, creating designated bus lanes and stops with amenities like WiFi, and ensuring accessibility for disabled individuals. The estimated cost for these improvements ranges between $25 million and $30 million, with projected benefits outweighing the expenses. The report highlights potential positive impacts like reduced traffic congestion, improved access to education and jobs, increased tourism revenue, and greater social inclusion. However, as of November 2023, the government's plans for implementing these recommendations remain unclear.

Click here for more on 2022's Transport & Traffic Statistics

Other Key Infrastructure Projects

Other key development projects are underway, at least in the conception phase.

• Expansion or potential relocation of the Island's cargo port, driven by the anticipation of reaching its capacity within the next decade. The estimated cost for on-site expansion is projected to be around $73 million.
• Upgrading the submarine cable infrastructure.
• Modernisation of the Islands' prison system with the construction of a new 250-inmate capacity facility, that consolidates all inmate groups onto one premises. The slated completion date for this development is set for 2027.
  
  
  Sources for this page:
  
  ESO - Consumer Price Index Report
  
  SPS – 2023-2026 Ci Government
  

• CNS - Cayman News Service