CIG SECOND QUARTER SURPLUS EXCEEDS EXPECTATIONS

The National Coalition For Caymanians(NCFC) government could take some optimism from the performance of the government’s finances for this year so far, according to the just-released Quarterly Financial Report for the Six-Month Period Ended 30 June 2026.

“The financial report concluded that the second quarter’s performance has positioned the Government to be optimistic about its performance for 2026. If planned activities and projects proceed as anticipated, the surplus at 30 June 2026 is expected to decrease by year-end – a trend which is entirely consistent with past years,” the report stated.

Minister for Finance and Economic Development Hon. Rolston Anglin stated, “The results for the 2026 half-year are extremely encouraging. Revenues have outperformed the budgeted expectations. This demonstrates a strong, confident economy. We have underspent on the expenditure side as we have been responsible stewards of the public purse. So, overall to 30 June I am extremely pleased with the results, but the Government will, as ever, remain vigilant over the second half of 2026.”

Surplus

The overall EPS surplus of $252.3 million was $67.3 million, or 36 per cent greater than the projected year-to-date operating surplus of $185.0 million.

“This favourable position was primarily due to actual revenues being $43.8 million higher than budgeted for the period, including a $33.3 million favourable variance in coercive revenues.”

Comparing year-on-year results, the Entire Public Sector(EPS) surplus was $50.8 million higher than that achieved for the same period in 2025.

Statutory Authorities and Government Companies(SAGCs) also recorded a combined net operating surplus of $7.9 million for the first six months of 2026. This was $10.1 million more favourable than the budgeted operating deficit of $2.2 million and had a positive impact on the overall EPS surplus.

This was mainly attributed to better than expected results at the Cayman Islands Airports Authority, Cayman Islands Monetary Authority, Maritime Authority of the Cayman Islands, National Roads Authority, and Port Authority. These favourable variances were partially offset by the unfavourable performance of Cayman Airways, the Health Services Authority, and the Water Authority.

Revenues

The first six months of 2026 generated total revenues of $856.2 million, which was $43.8 million more than budgeted expectations and $89.9 million higher than the 2025 year-to-date actual results.

The report shows that the higher-than-expected revenues to-date compared to the budget was mainly due to an increase totalling $33.3 million in compulsory fees, duties, or taxes and other charges.

Those mainly came through the financial services and tourism sectors. For example, Mutual Fund Administrators Fees and Private Fund Fees were $7.9 million and $7.1 million higher respectively, due to an increase in the volume of funds registered. Compared with the prior year-to-date results, these fees were $8.7 million and $9.3 million higher, respectively. These financial-services fees are regulatory licences due at the beginning of each calendar year and typically align favourably with budget through the second quarter before stabilizing for the remainder of the year.

Tourist Accommodation Charges were $3.7 million higher than budgeted, mainly due to record visitor arrivals, including an approximate 11% increase in air arrivals and a 6% increase in cruise arrivals compared with the prior year-to-date period.

Stamp Duty on land transfers were $22.0 million higher than expected and Land Holding Companies Share Transfer Charges were $4.6 million higher than budgeted. The report explains that this reflected the stamp duty rate increase from 7.5% to 10% effective 1 January 2026, as well as higher transaction volumes and property values. The respective 2026 revenues of $80.9 million and $5.3 million were $32.7 million and $4.9 million higher than the comparable period in 2025.

DRILLING FURTHER DOWN

At the same time, the report pointed out that notwithstanding the overall favourable results in revenues, when compared with the 2026 Budget, there were certain areas that fell short of projected expectations. These included reductions under the headings of Other Import Duty down $3.9 million, Motor Vehicle Drivers Licenses by $4.0 million, Special Economic Zone Grant Fee dropped by $3.4 million and Work Permit Fees down by $3.7 million. While those fell below the projected expectations, when compared with prior year-to-date results, Other Import Duties were $3.8 million higher and Work Permit Fees were $0.8 million lower. Motor Vehicle Drivers Licenses and Special Economic Zone Grant Fee were on par with the same period in 2025.

The second quarter generated revenues of $211.7 million, which was 9 per cent or $17.8 million, more than the second quarter of 2025 intake of $193.9 million.

Most of this change was attributable to increased Levies on Property, up by $25.5 million, partially offset by a $6.8 million decline in Import Duties.

Sales of Goods and Services posted at $26.2 million were $3.6 million more than the 2026 projections, and $1.8 million more than the prior year-to-date results.

Total Investment Revenue produced $12.5 million, which was $6.7 million more than budgeted for the six-month period. Higher cash balances held by the Government enabled larger values to be placed on deposit, increasing income earned on investments.

What are described as ‘foregone revenues’ for the second quarter amounted to $4.7 million. Many foregone revenues are statute-based (e.g. stamp duty waivers for Caymanian property buyers) and are granted once certain specified criteria in statutes are satisfied, whilst others are based on judgement and discretion.

Expenses

Total Operating, Financing and Non-Operating Expenses for the first six months of 2026 amounted to $611.8 million. This was $13.4 million less than the year-to-date budget of $625.2 million and $39.5 million higher than the prior year-to-date actuals.

There were savings against budget of $19.9 million in Personnel Costs and $14.0 million in Supplies and Consumables.

These savings were offset by higher-than-budgeted expenditure in Outputs from SAGCs by $7.5 million, Outputs from Non-Governmental Suppliers by $8.4 million, and Transfer Payments by $12.2 million.

The report noted that year-to-date savings in Personnel Costs and Supplies and Consumables may not translate into full-year savings and may reflect timing differences. Vacant posts and delayed projects affect the current costs in these categories.