Gibraltar stands rock-steady

A territory in Europe where the economy is growing at 6%, there’s record employment and public debt at just 7.5% of GDP. Sounds like a work of fiction but this is exactly what the Chief Minister of Gibraltar just announced in his Budget speech. The prospects for this economy are both sound and stable.

In the parliamentary session of 25 June Chief Minister Peter Caruana had every right to feel upbeat. Despite hugely tough global conditions, which he acknowledged Gibraltar was not immune to, the economy had demonstrated its diversity and robustness by continuing to report positive growth. The Government had resisted the temptation to raise taxes, instead announcing a wave of further tax cuts in the new Budget, and overall the Rock has responded well to the crisis which has brought other nations to their knees.

Brian Stevendale, Sales & Marketing Director for Ocean Village comments, “The day before, on 24 June, the OECD revised down its growth estimate for the UK economy from 3.7% to a massive 4.3% contraction. The biggest one year fall in GDP since 1945. For Gibraltar to hit back with a 6% growth rate for the year ending March 2009 – on the back of 8.8% for March 2008 - is quite incredible and proves that we’re doing something right. Additionally the Rock has record employment with job losses quickly repaired with job creation and a minimal net public debt. According to the ONS public debt in the UK was 47% of GDP by the end of 2008 and some predict it could rise as high as 70% by the end of 2009. In Gibraltar net debt has fallen to a minimal 7.5%. The Government should take credit for looking into the future and managing the economy with precision.”

The good news continued for Gibraltar’s citizens in the shape of a wave of tax cuts – some to have quite a significant impact on companies. From 1 July 2009 any new company established in Gibraltar will enjoy a start-up rate of 10% corporate taxation. And, from 1 January 2011, this lowest or equal lowest rate of corporation tax in the EU will apply to all companies. Meanwhile the top rate of taxation for individuals has dropped from 38% to 35% - a far cry from Darling’s much maligned 50% top rate which has tempted British entrepreneurs into mass exodus.

Of course it’s not all a bed of roses, the Chief Minister felt it was time to adjust-up some day-to-day costs of living and hiked the price of petrol by 4p a litre. But with fuel around 40% cheaper in Gibraltar compared to that of the UK, it’s hardly going to have citizens demonstrating in the streets…

For further information on Ocean Village, visit oceanvillage.gi