Decline of finance continues but overall economy flat

Thursday 02 October 2014

Jersey’s finance industry has shrunk by a third since 2008 according to the latest official statistics.

The economic figures released yesterday afternoon show that the overall economy was flat in 2013, but that the dominant finance sector shrank by a further 3% last year – news unlikely to be welcomed by ministers with less than a fortnight to go until election day.

The figures also demonstrate just how far wrong the forecasts from the Treasury department were - the Medium Term Financial Plan agreed just over two years ago predicted GVA growth of 1.2% in 2011, 1.4% in 2012 and 2% in 2013. In reality, the Island has not got near those ambitious projections - the economy declined by 1% in 2011, fell by 4% in 2012 and was flat this year.

The gap between the forecasts and the actual performance has caused the deficit in public spending estimated at £95 million over three years, which the outgoing States has agreed to fund through cuts and raiding funds and States-owned utilities.

The GVA figures show that although some sectors saw improvements over the course of the year – agriculture was up 12%; and the transport, communications and storage sector rose 6% - the overall picture was of no real change. The figures show that Jersey’s economy was worth £3,690 million at the end of 2013, compared to £3,697 million the year before.

But there was some good news – 2013 was the first year since 2007 that has not seen a decrease in the size of the economy, measured by Gross Value Added (GVA) in real terms.

The figures show that Jersey’s economy remains at its lowest point since GVA figures were first calculated in 1998.

The figures showing how Jersey’s economy is divided up – and shows that despite the decline, Jersey is still heavily reliant on the financial services sector. The main sectors are: finance (42%); public administration (9.5%); wholesale and retail (7.3%); construction (5.7%); hotels, restaurants and bars (4.1%) and agriculture (1.5%).