Jersey’s key annual report measuring the islands economic performance was published this month.
In 2018, GDP increased by 1.8% on an annual basis to £4,642m. This was £43,470 measured by GDP per head of population, an increase of 0.6% in real terms.
The headline figure was reasonable but comparatively the stats were not good over the most recent 5 year period. Since 2013, GDP per head of population has increased by 1% in Jersey and by 7% in the UK, but most significantly by 12% in nearby Guernsey.
Like the UK, the productivity puzzle has been a key factor in the Island’s mediocre performance. The most recent figures showed productivity was unchanged in real terms on an annual basis.
The finance sector saw productivity increase by 1% but his was offset by the non-finance sectors which overall saw productivity decrease by 1%
Productivity has fallen by a whopping 23% since the previous peak in 2007, driven largely by a one third decline in the productivity of the finance sector. Productivity in the non-finance sectors has declined by 6% since 2007.
To June 2019 there was a 0.1% fall in the annual rate of inflation to 2.8%, the lowest rate for two years. A fall in housing and household costs explained most of the drop.
A £70m project to build a Premier Inn Hotel and 144 flats in St Helier have been approved. The island’s second Premier Inn is expected to be completed by 2021, with the flats ready by 2022.
In Guernsey, the number of tourists staying between July and September was up by 4% from the same period in 2018, according to Visit Guernsey. There were nearly 2,600 more visitors staying on the island overnight, which accounted for 11,500 additional nights in paid accommodation.
The reopening of the Victor Hugo House and an accompanying marketing campaign in France saw visitor numbers from France grow by a colossal 94% to just under 16,000.
These achievements were marred a little by the weather, which caused a 22% drop in the number of cruise ship and private yacht passengers disembarking. Overall, visitor numbers were down by 5% to 184,000 in the period.
A £30m cable linking Guernsey to Jersey has been laid and will restore Guernsey to the European grid next month, after the island has burnt oil for more than a year.
Once it is operational, Guernsey will be supplied mostly by French nuclear and renewable energy.
A second project to install a cable linking the island directly with France by the mid-2020s is estimated to cost £85m and is likely to need some public funds.
The GSLP Liberals will govern Gibraltar for another four years after winning the General Election with 52.5% of the vote.
The GSLP Liberal Alliance is a centre-left political alliance formed by the Gibraltar Socialist Labour Party and Liberal Party of Gibraltar. The Alliance won 10 of the 17 seats with incumbent Chief Minister Fabian Picardo topping the poll.
The government’s economic plans aim to make Gibraltar’s economy ‘future proof’, despite Brexit and slow growth in the UK, where most of the customers for Gibraltar businesses are based.
Ministers intend to reposition the Rock’s economy again similar to the 1980’s switch when the closure of the Dockyard and the reduction of the MOD’s presence impacted the economy. Online gambling firms have recently relocated part of their operations to Malta due to Brexit uncertainty.
Minister for Economic Development, Sir Joe Bossano, predicted a growth rate of 15% over the four year cycle which would take the size of the economy from c£2.6bn to £3bn.
The government will explore an investment in Modern Methods of Construction for new buildings (assembled on site like lego), land reclamation and more solar power.
A Double Tax Agreement has been reached by the Governments of Gibraltar and the UK. Both Governments said the deal will promote trade and investment, help tackle tax avoidance and allow for no-deal Brexit planning.
A vote of confidence in the Rock from Spanish supermarket chain Eroski, which is to open its third Gibraltar store in Midtown. Opening in early 2020, the store will be around 20% larger than the Eroski City store at ICC.
Isle of Man
Unemployment in the Isle of Man fell by 0.1% in September to 0.7%. In comparison, the South West of England continued to record the lowest rate on the UK mainland at 2.4% with the overall UK rate at 3.9.
The annual rate of CPI inflation decreased in September 2019 to 1.1%, down a huge 1.4% from 2.5% in August 2019. The reduction was caused by price drops in clothing and footwear, housing, water, electricity, gas and other fuels and transport. Petrol and oil was the biggest contributor to the decrease in prices in transport.
Evidence to the Tynwald’s Public Accounts Committee continued into the Isle of Man government’s £60m ‘investment’ into the film industry.
The investments included the 2008 feature film Me and Orson Welles, starring Zac Efron, which lost taxpayers more than £9m and the animated feature Chico and Rita, which also lost the public purse £2.8m.
Overall the Committee is investigating £27m of losses from the island’s Media Development Fund between 2007 and 2016.
A former government minister said changes to UK tax relief on films and the 2008 credit crunch recession had ‘an impact on projections’. In 2012, the then UK Chancellor George Osborne, announced tax breaks for films made in the UK would be extended to high-end television projects and animated features.
The new rules meant companies could claim back 25% of their UK production costs, provided projects qualify as British under a cultural test; the changes rendered some production in the Isle of Man less competitive.