Government reported an operating surplus of $159 million in the second quarter of 2022. This figure is $14 million more than budgeted and $3.1 million higher than the same period last year.
If statutory authorities and government companies are included, the surplus is $145.6 million, which is $18.2 million more than projected.
Although government had budgeted for higher revenues than last year by the end of the second quarter, it collected $34.8 million more than forecast for a total of $636.6 million.
This was mainly due to better coercive revenue performance, in particular financial services, and work-permit and property-related fees.
Government income in the first six months of the year was $56.6 million higher than during the same period in 2021 and $100.7 million more than revenue collected in the first half of 2019, the most recent comparable period before the pandemic.
General Registry took in $3.5 million more than budgeted from partnership fees alone, as this particular fee income was 7% higher than last year.
The larger number of registered funds meanwhile pushed financial services fees collected by the Cayman Islands Monetary Authority to a surplus of $5 million over the budgeted amount.
Mutual fund administrators licence fees, private fund fees and securities investments business licence fees saw a $10.7 million, or 8%, increase compared to the first half of 2021.
Work-permit revenues were higher than the budget by $6.5 million, representing increasing demand for workers as the economy moved into phase five of the border-reopening plan, government said in a press release. In total, work-permit fee income in the first six months of 2022 rose by almost a third, or $12.2 million, over last year.
Property-related revenues, which peaked last year, continued to outperform expectations with a surplus of $18.2 million over the budgeted amount, even though actual income was $4.6 million lower than in 2021.
Higher government revenues during the period were offset by larger expenses. They amounted to $477.6 million in the first half of this year, $20.8 million more than anticipated. Compared to last year, expenses increased by $53.4 million.
The biggest unplanned cost drivers were tertiary health care costs, which were $13.9 million higher than budgeted; the public schools meals programme, $1.9 million more; and $21.5 million higher than the initial 2022 budgeted expenditure for the ex-gratia tourism stipend programme.
These overages were somewhat offset by underspending in other areas.
Government maintained $486.2 million in total cash and fixed deposits at the end of June.
This consisted of $321.2 million in operating cash, of which $299.8 million are held as fixed deposits, and $165.0 million in reserves and restricted cash balances.
Finance Minister Chris Saunders said he was pleased with government’s financial performance during the first six months of the year with a surplus that allows government to continue the support of programmes addressing the effect of cost-of-living increases.
He said government revenues were about $100.7 million, or 19%, higher than pre-COVID in 2019.
“We recognise, however, that there continue to be challenges to overcome – especially with regard to current global economic trends. And closer to home, while our Tourism sector continues in its recovery, it will be some time before we get close to pre-pandemic levels,” the finance minister said.
Premier Wayne Panton noted that most government revenues are collected in the first half of the year, adding that “our obligation is to maintain the fiscal discipline throughout the second half”.
Source: Cayman Compass
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