FINANCE MIN. ANGLIN: ECONOMY STILL STRONG, BUT FIXES NEEDED

By Staff Writer

Parliamentarians are this week subjecting the first budget of the ruling National Coalition For Caymanians(NCFC) government to rigorous scrutiny in the budget debate, which for the most part echoes the recent debate of the government’s pre-budget Strategic Policy Statement(SPS).

Any concessions which the main Opposition People’s Progressive Party(PPM/Progressives) had hoped for were not immediately noticeable in the budget presented last Thursday by Hon. Minister of Finance and Economic Development, Rolston Anglin.

That was mainly focused on the revenue-raising measures and projected surplus in the KYD1.2 billion budget.

The 2026-2027 budget includes new revenue measures projected to generate $172.4 million, broken down into $72.5 72.5million in 2026 and $99.9 million in 2027.

That is structured to come from additional fees on the financial services sector - Cayman’s main economic pillar and one of the leading financial sectors globally. Additionally there are several targeted domestic fees mainly from stamp duty on high-end land transfers and immigration fees including new levies, along with various trade and business licence fees such as Special Economic Zone Trade Certificate Fees and Local Companies Control Licence Fees.

CHALLENGES INHERITED

Mr Anglin had framed the budget as guided by the theme: “A Responsible Path to a Stronger Tomorrow - A Pragmatic Approach to Addressing the Public’s Needs”.

While largely reflecting what was previously outlined in the SPS, the Budget Statement included several updates.

The projections are for the government to be broadly in a much stronger financial position, with implications for the wider economy.

“Operating revenues are forecast to be KYD1.184 billion, which is some $48 million higher than the estimate on the original 2025 budget,” Mr Anglin had stated. He explained that the higher-than-budgeted operating revenues are mainly due to favourable variances in financial services and real estate-related revenues.

On the other hand, he pointed out that “finance expenses for core government are forecast to be $1.174 billion for 2025, which is $90.9 million greater than the original budget of $1.083 billion.” The Finance Minister said this significant increase in costs is due mainly to under-funding in the 2025 budget - putting the blame squarely on the previous administration.

In his words: “The major drivers for the increased operating expenditures are outputs from non-governmental suppliers anticipated to be $4 million to $5.1 million higher than originally budgeted, mainly due to tertiary level medical care at various local and overseas providers for uninsured, under-insured and indigent persons being significantly under budgeted in the 2025 original budget.”

Mr Anglin also listed other medical assistance costs, scholarships, and deficits accrued by government companies and statutory authorities as having contributed to the depleted surplus projection. That aligns with the earlier deficit warning in April in the Pre-Election Economic and Financial Update(PREFU), which was published in the latter stages of this year’s election campaign. It became a hot topic then, as it did again during last month’s SPS debate in Parliament.

As a result, the government’s surplus for 2025 will come in at KYD10.3 million, which Mr Anglies said will be $40.9 million less than the original budgeted operating surplus of $53.2 million.

Looking forward to 2026 and 2027, he projected a much-improved outcome, especially for 2027.

IMPROVED OUTCOMES PROJECTED

“The entire public sector is forecast to have an overall net surplus of $6.7 million in 2026,” he reported, noting a significant improvement in the outlook for 2027. According to him, when all factors are taken into consideration, “the entire public sector is forecast to have an overall net surplus of $30.5 million in 2027.”

That major forecast improvement contrasts with the projection in the SPS for which the NCFC was criticised by the Opposition, that “they can only muster surpluses of $6.5 million in 2026, $9.3 million in 2027, and $13.8 million in 2028.”

Regarding the new surplus projections, Mr Anglin stated: “Whilst these surpluses may not be as large as those in previous years’ budgets delivered to this honourable house, they are through careful and honest budgeting.”

He also outlined several new initiatives planned by the NCFC government, especially covering ballooning health insurance costs. Saying that the situation is unsustainable, Mr Anglin appealed to the Opposition to join a special committee being established to review the issues and come up with recommendations.

The government is also targeting specific policies in education and related areas to ensure that Caymanians are prioritised and have a smooth pathway into key roles in the job market.

Minister of Finance Anglin, who is an independent member in the NCFC coalition, upheld Cayman’s debt-to-GDP (gross domestic product) ratio as the envy of many other countries. ”The government’s debt to GDP ratio averages 8.5 per cent over the 2026 to 2027 budget period, which is an enviable metric that few countries in the world can match,” he declared.

He also hailed Cayman as a leader among regional economies. “Through continued discipline and investment in resilience, this Government remains confident that the Cayman Islands will maintain its standing as one of the region’s strongest and most stable economies.”

Assertions by the government that it had inherited a fractured financial position and challenges resulting from decisions deferred by previous governments had led to heated exchanges in the SPS debate. With the government persisting in this stance, the budget debate was seen as largely echoing those themes.