While the Cayman Islands’ gross domestic product grew by 2.1 percent last year, the highest growth for the country since 2007, separate government reports show that the consumer price index fell by almost half a percent in the first quarter of 2015, and that imports declined by almost 13 percent.
The 12.9 percent decline in imports for the quarter was mainly based on falling gas prices, but imports of construction materials, vehicles and telecommunications equipment also dropped, according to the Economics and Statistics Office.
The inflation rate for the Cayman Islands fell into the negative column, with consumer price growth shrinking for the second quarter in a row.
“This is the first time since September 2010 that the CPI of the Cayman Islands showed a negative movement,” Finance Minister Marco Archer said in a statement. “It parallels the 0.1 percent CPI decline in the United States during the same period. The general price movements in the two countries reflect the impact of global oil price reductions.”
Consumer prices in the first quarter of this year fell by 0.4 percent compared to the same period in 2014. The ESO report states that electricity, gas and other fuel prices dropped by 13.6 percent for the quarter, leading to an overall 1.1 percent decline for the housing and utilities category. “Average insurance fees went down by 3.8 percent; in particular housing insurance premiums fell on average by 8.0 percent,” the quarterly report states.
The category for restaurants and hotels had the sharpest total decline at 8.2 percent, according to the ESO report, following a more than 40 percent decrease for accommodation services. Catering services registered a half-percent increase for the quarter.
Education costs rose 2.7 percent for the quarter, led by a 4.3 percent increase in school fees for primary and pre-primary schools. The index for food and non-alcoholic beverages rose by almost 3 percent. Prices for milk, cheese and eggs were up almost 8 percent. Meat and meat product prices rose 5.8 percent, and the categories for breads, cereals and seafood increased by more than 5 percent each.
Petroleum and related products led the way for declining imports, with the total value of those products down 45.9 percent, according to the ESO report. Gas import prices dropped 42.5 percent during the quarter, according to customs data in the report.
Taking out the sharp 45 percent decrease in the value of petroleum-related products, all other imports decreased by 3.6 percent to $152.7 million for the quarter.
Machinery and transport equipment, and miscellaneous manufactured goods declined by more than 20 percent each.
“The CI$6.4 million fall in the machinery and transportation category is traced to a decrease in road vehicles, aircraft equipment and telecommunications equipment,” the ESO report states.
In manufactured goods, construction material imports dropped by more than 30 percent.
The index for beverages and tobacco declined 6.3 percent.
The United States remains, by far, Cayman’s largest trading partner, accounting for $161 million of the almost $177 million reported by the ESO. Imports from the U.S. dropped by more than 15 percent from the first quarter of 2014.