Economy of Anguilla
This article is an overview of the economy of Anguilla.
Anguilla has few natural resources, and the economy depends heavily on luxury tourism, offshore banking, lobster fishing, and remittances from emigrants. The economy, and especially the tourism sector, suffered a setback in late 1995 due to the effects of Hurricane Luis in September but recovered in 1996. Increased activity in the tourism industry, which has spurred the growth of the construction sector, has contributed to economic growth. Anguillan officials have put substantial effort into developing the offshore financial sector, which is small, but growing. A comprehensive package of financial services legislation was enacted in late 1994. In the medium term, prospects for the economy will depend largely on the tourism sector and, therefore, on revived income growth in the industrialized nations as well as on favorable weather conditions.
Anguilla's economy fell with the fastest speed in the world due to the 2008 world financial crisis. Due to its small size and reliance on tourism and foreign direct investment, Anguilla is vulnerable to external economic conditions in the United States and Europe. Therefore, economic growth in Anguilla can be very volatile. A 3.3% increase in GDP is expected for 2012 following a period of rapid expansion (2004-2007) and contraction (2008-2010). Weak global demand for tourism and oil price volatility are downside risks to economic growth moving forward.
Anguilla has a GDP (purchasing power parity) of $108.9 million (2004 est.), a GDP (real growth rate) of -8.5% (2010 est.), and a GDP per capita PPP of $8,800 (2004 est.). As of 2002, 78% of its GDP was derived from services, 18% from industry, and 4% from agriculture. 23% of the population was below the poverty line. The inflation rate (consumer prices) is 5.3% (2006 est.). As of 2000, the Anguillan budget was estimated as follows:
- revenues: $22.8 million
- expenditures: $22.5 million
As of 2001, Anguilla had a labor force of 6,049 divided as follows:
- commerce 36%
- services 29%
- construction 18%
- transportation and utilities 10%
- manufacturing 3%
- agriculture/fishing/forestry/mining 4%
There was an unemployment rate of 8% in 2002.
Major industries in Anguilla include tourism, boat building, and offshore financial services. In 1997 there was an industrial production growth rate of 3.1%.
Agricultural products include small quantities of tobacco, vegetables, and cattle raising.
In 2011 Anguilla became the fifth largest jurisdiction for Captive Insurance, behind Bermuda, Cayman, Vermont and Guernsey. The captive industry plays an ever increasing and important part of Anguilla's financial services industry. Captive management firms, including Capstone Associated Services, have staffed offices in Anguilla in order to service the fast-growing captive insurance industry.
Anguilla's current account balance is -$42.87 million (2003 est.). As of 2006, its exports were valued at $13 million (2006). It exports lobster, fish, livestock, salt, concrete blocks, and rum to the UK, USA, Puerto Rico, and Saint Martin. Its exports were valued at $143 million. It imports fuels, foodstuffs, manufactures, chemicals, trucks, and textiles from the US, Puerto Rico, and UK.
External debt was $8.8 million as of 2008. Anguilla received approximately $9 million in annual economic aid as of 2004.
Anguilla's currency is the East Caribbean dollar (XCD). The exchange rate has been fixed since 1976 at 2.7 East Caribbean dollars per US dollar.
- 4. Property & Casualty 360, May 3, 2012, http://www.propertycasualty360.com/2012/05/03/831b-captives-small-option-is-increasingly-big-id