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
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.
"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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