Careful; Global Economic Contraction coming, warns FSC

By Deandrea Hamilton

Editor

#TurksandCaicos, September 2, 2023 – The global economy, warned to Niguel Streete, Managing Director of the TCI Financial Services Commission is poised for contraction based on IMF forecasts; Streete, in speaking to financial sector professionals and Turks and Caicos country leaders had a hefty report on Friday August 24, 2023 at the FSCs Annual General Meeting.

“The macro-financial environment is facing challenging conditions worldwide due to high inflation, interest rate volatility, disruption in global supply chains and slowing economies.  Global growth has slowed and although recession has not yet set in, the IMF predicts that a third of the global economy is set to contract beginning this year. Assets and equity prices have fallen in some markets and overall market confidence, is fragile,” he said.

Streete nonetheless reported that the Turks and Caicos’ finance sector was healthy, even as dramatic changes and shifting goal posts were clouding the industry.

“The TCI is a small, developing, open economy that is working to establish itself as a premier financial services sector at a time when financial services center face intense and growing scrutiny.  This is also a time when many developed countries are retreating into nationalistic and protectionistic postures,” explained Streete in making a case for the challenges being faced by the sector.

The managing director reported that the non-banking financial services sector had assets which contracted by 2.5 percent with investment business falling.  Trust companies assets also experienced contraction by 15.5 percent, while yielding higher profits said Street and though the insurance industry is stable with assets expanding, there was a decline due to the impact of Hurricane Fiona in September 2022.

The Money Services sector recorded growth in assets and profits.

“The value of funds transmitted rebounded on account of increased sending activity to the Dominican Republic and Jamaica. However, there was a continued decline in sending activity to Haiti.”

It was shared that changes in foreign exchange regulations in Haiti, accounted for the decline.

Navigating Change was the theme for the AGM, which also featured presentations by the territory’s governor, premier, minister of finance and keynote speaker, Cindy Scotland, Managing Director of the Cayman Islands Monetary Authority.

Overall, the TCIs financial sector, ranked as the No. 2 industry for the islands, is steady.

“The TCI financial sector is expected to remain resilient with the capacity to absorb adverse outcomes and continue to support the domestic economy.”

The AGM, carried live on Facebook, was held at the Shore Club, Long Bay Beach, Providenciales in the Turks and Caicos Islands to a near capacity audience at the one day meeting.