Select a region
The impact of corona virus on Jersey’s economy has been abrupt and sharp – but will it be long-lasting?
The recent figures to be issued by the government suggest that our GVA is being hit by around £122m a month, and is about 30% down in total. None of us went into 2020 expecting the last few months to be like this, which means every single employer in Jersey is adapting, and trying to find a way though the obvious issues which this virus is presenting.
In many cases, cash, confidence and customers have departed, leaving owners to pick through the remains of their business plans, and see what can be done for the second half of the year.
To help them do that, Express has collated views from a selection of local businesses, and various industry sector representatives, which are published in this month's edition of Connect Magazine - you can read it here.
Pictured: Express will be featuring the views of various business leaders on how the rest of the year will look.
Today, we focus on Financial Services.
Financial services overview by Joe Moynihan, CEO, Jersey Finance
"With restrictions beginning to be lifted both in Jersey, and in many of the overseas markets where Jersey’s finance industry is active, the cost of the pandemic is becoming clearer. It is devastating and it is long-term. Economies, it is predicted, will take years to recover.
Locally sectors such as hospitality and retail, which play such a pivotal role in our island economy, are suffering greatly with business owners and employees undoubtedly undergoing a particularly distressing time.
I believe that we, the finance industry, have an obligation as good citizens to work together to support each other and our wider economy and community. It’s why as the industry has been working hard to introduce measures to support those who need support locally and internationally.
In particular, figures published by the Government of Jersey show that the total value of loans approved under the government-backed Business Disruption Loan Guarantee Scheme stood at £754,000 as at 11 May – just a matter of weeks after it had come into play. That is a pretty impressive turnaround by local banks to approve loans and support local businesses.
We have also been in regular contact with our Members about how they could support local community groups, charities and SMEs, and the response was overwhelming.
At the same time, as an internationally dynamic and resilient international finance centre (IFC) we stand ready to aid the road to recovery beyond our own shores. The International Monetary Fund is forecasting that the global economy will shrink by 3% this year, with around US$9 trillion being knocked off global GDP over the next two years. The Bank of England, meanwhile, has warned that the UK economy will experience its deepest recession on record, with the economy being on course to shrink 14% this year.
Pictured: Jersey's economy is predicted to shrink by more than 6% in 2020, in terms of GVA.
However, just as we saw in the aftermath of the global financial crisis more than a decade ago, I remain convinced that reputable centres like Jersey will be critical to the global economic and social recovery from the pandemic.
The sort of expertise, governance, robust platforms and solid advice that IFCs like Jersey are renowned for will be increasingly sought after as getting capital from multiple sources securely, rapidly and efficiently to where it is needed most becomes increasingly important.
The fact that around 60 million people worldwide benefit from having their pension funds administered through Jersey, that Jersey helps distribute around US$76 billion in foreign direct investment to global markets annually, and that Jersey is playing host to a growing base of ESG and impact funds each year, underlines the role it can have in meeting global needs over the coming months.
These are challenging times, but the strengths of our industry will remain; our expert workforce of almost 14,000 employees, our first-class regulatory standards, and our range of innovative products and services. Our finance industry has an opportunity to really demonstrate what it excels at and has both the responsibility and the capability to play a vital part in the road to recovery, at home and internationally."
Tomorrow: the views from Banking, Funds and Trusts.
