The Island's economy is heading for a healthy real growth
rate of between three and four per cent in the current financial
year, according to the Government's latest quarterly economic
report.
The report, produced for the Council of Ministers by the
Treasury's Economic Affairs Division, covers the three months
up to the end of June this year. It provides positive updates and
outlooks for various sectors including manufacturing, e-business,
shipping, aircraft registration, clean tech and tourism.
Welcoming the report, Chief Minister Allan Bell MHK
commented:
"The continuing growth of the Isle of Man economy is the
result of a number of factors, including our policy of
diversification, the partnership approach between Government and
the private sector, and our competitive, reputable business
environment. It is a testament to the professionalism and quality
of service that the Island offers to customers around the
world."
However, Mr Bell added that there are two important caveats to be
observed when talking about the Island's ongoing economic
success. The first concerns elements of the domestic economy, and
the second is about the relationship between economic growth and
the revenues received by Government to fund public services.
He explained:
"Government is sensitive to the fact that, while the
international sectors of the economy are generally doing well, some
of the inward-facing local sectors are struggling. This picture is
confirmed by the latest quarterly report, which shows that
retailing and construction are particularly flat, and we are making
efforts to support those sectors."
The Chief Minister went on:
"The point about the relationship between economic growth and
Government revenue is a fundamental one for the public, and indeed
all politicians, to be aware of. While continuing growth is welcome
and vital, it will not get Government off the hook of its budgetary
challenges.
One of the reasons for our economic success is the Island's
competitive tax structure, but that structure does not produce
growth in public revenues at the same rate as growth in the
economy. There is something of a disconnect between the two, so we
cannot rely on economic growth alone to bridge the Government's
fiscal gap."
Mr Bell concluded:
"Economic growth is of course still essential to generate job
opportunities, incomes and a decent standard of living for the
people of the Isle of Man. But we cannot sit back and hope that
growth will eventually rebalance the budget for us - which is why
we must continue to focus on containing and prioritising public
spending to make the best use of the limited resources
available."
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