Lyndon Trott, chairman of industry promotional agency Guernsey Finance, also said that Guernsey’s more diversified finance industry made a difference in the strength of the island’s recovery.
He offered the assessment after an economist contrasted Guernsey’s economic performance with that of Jersey’s during the Covid-19 pandemic.
Presenting the EY Item Club’s latest assessment for the Channel Islands, chief economic adviser Martin Beck said that Guernsey’s economy shrank by 3% in 2020 while Jersey’s fell back by 9.2% – similar to that seen in the UK.
Guernsey’s economy was more likely to recover to pre-pandemic levels more quickly, he said also, with the damage done so limited, it was comparable to recent non-pandemic years.
He said that the difference between the two islands was driven by Guernsey’s much better performance in hospitality – thanks to domestic spending on meals and staycations – and a more diversified finance industry. Jersey’s hospitality sector dropped by 45% in the space of the year, while Guernsey’s was down 33%, said Mr Beck.
‘What is striking is just how insulated or relatively well-performing Guernsey was. GDP fell by only 3%, whereas Jersey’s drop was the biggest since records began in 1999.
‘For Guernsey you only have to go back to 2012 to find a year where the economy actually did worse than 2020.
‘So Guernsey’s economic performance was very impressive. Jersey’s was bad, if not worse than the UK’s.’
Financial services output in Jersey was down about 11% while Guernsey’s saw a drop of just 2%.
Deputy Trott said he agreed that Guernsey’s financial services lockdown performance was ‘very impressive’ and pointed out that it had not required or received any support from the public purse.
‘It is true to say that Guernsey’s financial services sector is less bank-orientated than Jersey and there is no doubt that low interest rates have impacted banks’ performance significantly in recent years more generally,’ he added.
‘It is also fair to say that Guernsey’s financial services sector is more diverse generally, with the extra leg of a developed insurance sector assisting us in leading the way as the largest European domicile for captive insurance vehicles and a growing pensions market.
‘Lastly, we emerged from lockdown earlier, and returned to business as usual faster, and I believe that contributed materially to our economic performance.’