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(CNS): The Cayman Islands government started the year with a surplus of more than Cayman dollars 260 million, well above the expected $214.1 million, due to higher-than-expected revenues and lower-than-expected personnel costs in the first quarter of 2024. According to unaudited financial results for the period, the core government collected $27.4 million more in revenue than expected during the three months, while spending on civil service salaries and benefits fell by $11.5 million.
The report It shows that CIG’s revenue this year is $39 million more than last year, but its expenses increased by $22.2 million compared to the first quarter of 2023.
Posted in Government Communiqué Earlier this month, the latest document on the state of public finances showed how important the financial services industry is to government coffers. Almost all of the extra $27.4 million in revenue came from fees from tax-exempt companies, partnerships and private equity funds.
“Due to the cyclical nature of revenue, first quarter mandatory revenue of $489.5 million is expected to be the highest revenue for any single quarter through 2024,” government officials said in the report.
Annual regulatory licensing fees, due at the beginning of each year, always boost government revenues in the first quarter, while total revenue collected in the first three months accounts for almost half of the government’s projected full-year revenues for 2024.
But not all costs were as good as those for the offshore sector, with some falling short of expectations. The $11.5 million in savings on staffing were also unlikely to be repeated as vacant positions could be filled. There were also some signs that some statutory bodies and government companies spent more than budgeted during the period, and the government’s health costs soared as usual.
The government paid the Health Services Authority (HSA) $5.6 million more than budgeted because the actual cost of indigent care was $8.4 million. The government also paid an extra $8.1 million more for the notorious grant NGS55 (foreign health expenses for uninsured persons) than budgeted at the beginning of the year.
The government also spent an extra $4.9 million on scholarships and bursaries in the first three months, and an extra $2 million in the financial aid budget.
Overall, SAGC posted a net operating surplus of $8.4 million for the first three months of 2024, about $8.8 million higher than the budgeted deficit of $0.4 million, mainly due to better-than-expected earnings from the Cayman Islands Monetary Authority, CINICO, the Port Authority and the Cayman Water Authority. However, these better results were partially offset by the poor performance of the Cayman Islands Airports Authority.
Treasury officials said adherence to fiscal policy continued to result in a significant increase in cash and deposit balances held by the government. Operating cash and deposits were $529.1 million, and reserves and restricted deposits were $173.5 million, for a total cash and deposit balance of $702.6 million, $36 million higher than projected in the 2024-2025 Program and Budget.
“The overall fiscal performance reported for the quarter showed a net surplus of $260.2 million per share, 22 percent above budget,” government accountants wrote in the report. “The first quarter performance gives the government confidence in its performance for 2024. During the remaining three quarters of 2024, costs must be carefully monitored to ensure that unnecessary expenditures are not incurred.”
CIG expects its total surplus to reach $42 million by the end of 2024, up from $42 million this year. $1.4 trillion budget.
Download the full report here.
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