GEORGE TOWN, Cayman Islands (CNS) — The Cayman Islands government’s fiscal performance is on track for a record surplus. The financial results for the first nine months of this year show the public purse bursting at the seams with a net surplus of $183.8 million. A 99 percent increase on the projected figures, government has already collected $91.3 million more than it had budgeted.
Officials said this was due to revenues and expenses both outperforming initial projections and the statutory authorities and government companies (SAGCs) doing much better than predicted, adding $15 million more to the public coffers. A decline in revenue and an increase in spending in the last quarter is expected but the government is still on track to exceed its original forecasts.
The unaudited Financial Report for 1 January to 30 September, released by the minister for finance and economic development on Friday, reveals a much better than expected performance, with core government registering a surplus of almost $173 million and the SAGCs another $11 million. Finance Minister Roy McTaggart pointed out that government revenue declines in the second half of the year but he remained confident that the government will easily make its forecast surplus for the whole of 2018.
“While revenues are generally lower in the second half of the financial year, the government is confident that the positive results for the first nine months of the financial year will enable us to achieve or exceed the budgeted net surplus of $81 million by the end of this year,” he stated.
These results were achieved by higher-than-anticipated coercive revenues from import and stamp duties, tourist fees and financial services-related revenues, officials said in a press release about the report.
Government registered higher than budgeted revenue in most lines. On the other side of the balance sheet government spent less than expected on personnel and supplies. The anticipated figures in the budget for staff was $13.2 million lower than forecast and more than $15 million for supplies and consumables. The positive variances were reduced by expenditures for non-government suppliers, which were $9.2 million more than expected.
Government ended the nine-month reporting period with a healthy bank balance, with cash and deposits standing at $535.2 million, $112 million more than the budget prediction. Debt also fell to $430.2 million, $35.7 million lower than the debt balance this time last year.
In the report ministry officials said the performance of the first three quarters of the year leads the government to be optimistic about hitting the budget predictions.
“If ministries, portfolios and SAGCs remain diligent the government should, at a minimum, achieve the budgeted EPS net surplus of $81 million at the end of 2018,” the report states. “However, the performance of the final quarter of 2018 will determine whether the government meets its budgeted performance, or surpasses it by a significant margin.”
Personnel costs are expected to increase during the last quarter following the 5 percent cost of living adjustment, which was paid in September 2018, back-dated to July 2018. But other expenditure will, at a minimum, stay at the levels seen in the second and third quarters. Positive results in revenue are expected to sufficiently mitigate any additional costs but “proper diligence must be maintained”, the report warned.