Escalating conflict in the Middle East sent the benchmark oil price back above $100 a barrel earlier this week, sparking renewed fears of a global economic downturn which could hit investment and jobs.
Economic Development president Sasha Kazantseva-Miller said yesterday that it was ‘too early’ to know whether there would be a recession in the short term, but claimed that Guernsey would be better placed than almost anywhere else to respond.
‘Guernsey has a very strong value proposition because of what we offer as a jurisdiction – a stable political environment, our taxation system, being a safe place to live and a great place to visit,’ she said.
‘We have got the superpowers really to capitalise on that as few jurisdictions have.
‘If anything, we are well-positioned to withstand any recessionary pressures.’
She warned that inflation posed a greater risk to the island, as Guernsey may not be as well-placed to withstand rising prices, amid speculation that oil could surge towards $150 a barrel, potentially breaking the record high reached in 2008.
‘We have to be mindful of inflationary pressures because we import a lot of inflation over which we have limited control,’ she said.
The annual rate of inflation in Guernsey fell to 3.4% last year, down from 8.5% in 2022.
The size of the island’s economy was last measured at the end of 2023, when it was estimated to be 2% smaller in real terms than at the end of the previous year. States IT problems have prevented the publication of more recent figures.
Deputy Jayne Ozanne believed there was ‘momentum and positivity’ about the island’s economy, but wanted to know whether Economic Development had carried out an impact assessment on the effects locally of a global recession which she felt was increasingly likely.
Deputy Kazantseva-Miller told the Assembly that global developments had been taken into account in a work plan which her committee would publish shortly, and a new economic development strategy to be published next year.
‘The last 12 months, and especially the re-election of Donald Trump, have highlighted the need to look at our economic strategy in a completely different fashion, and to look at long-term resilience and strategic partnerships and alliances which may have been different if we had been designing the strategy even 12 months ago,’ she said.
She added that Guernsey’s economic and trade advantages had been highlighted by Lord Marland, the chairman of the Commonwealth Enterprise and Investment Council, when he visited the island only 24 hours earlier.
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