It is the first year that the Jersey economy has shown real growth since 2007, with GVA (gross value added) – which measures the economic activity within the Island by sector – growing by five per cent and now totalling £3.9 billion.
The increase is mainly due to the strong performance of the finance sector.
According to the States Statistics Unit, the traditional economic measure of GDP (gross domestic product) went up by four per cent over the period and totalled £3.88 billion at the end of 2014.
Figures published in the Economist last year show that in 2014, GDP in the Euro area as a whole rose by 0.8%, with countries such as Germany and France seeing a 1.4 per cent and 0.4 per cent rise respectively. Meanwhile, countries such as the US and Canada both saw a 2.3 per cent increase.
Today, Assistant Chief Minister and the former Treasury Minister, Senator Philip Ozouf, said that the figures showed that Jersey had ‘turned a corner in a pretty decisive and impressive way’.
However, the statisticians say that in real terms, the average economic standard of living of Island residents has fallen by 20% since 2001, and by 19% since 2007 over the course of the recession.
Standard of living is calculated by expressing GVA or GDP per head of the population.
Despite the decline, GVA last year saw the first real-term increase per capita for seven years.
In comparison, between 2007 and 2014, the average economic standard of living increased by ten per cent in Guernsey and was essentially unchanged in the UK – down by less than 1%.
In terms of GVA by sector in Jersey, financial services accounted for 44.1%, public administration and services industries nine per cent each, wholesale and retail 7.1%, construction 6%, hospitality 3.8% and agriculture 1%.
Commenting on the statistics, Economic Development Minister Lyndon Farnham said: ‘Eighty per cent of the increase is from banking profits, but I am pleased to also see a rise in hospitality.
‘Retail and agriculture are down, but 2013 was an exceptional year for agricultural exports.
‘It shows that the markets are still quite fragile and it does not take a lot to show movement.
‘The important thing now is that Jersey is ahead of both the UK and Guernsey, which are relevant markets.
‘Of course, last year there was growth in the finance industry, but all of these things are coming together, which is helpful.
‘We just have to try and make sure that we keep the trend going.
‘So it’s a cautious welcome, but things are going in the right direction.’
Asked about the Fiscal Policy Panel’s comments that this year’s increase was a one-off for the finance industry and down to £10 million from just one institution, Senator Farnham said: ‘We can’t really tell.
‘Finance has come back quickly and last year saw a good turnaround, so I would hope that although we might not see five per cent growth next year, I anticipate further growth in 2015, but perhaps not at the level of 2014. I could be wrong, because it is difficult to forecast accurately.
‘But business surveys have been positive and it is all pointing towards optimism.’
Asked about the relative decrease in Islanders’ standard of living compared to the UK and Guernsey, the minister said it was important to keep the statistics in perspective.
‘We are still comparatively well off.
‘Since 2007 there have also been some changes of tax, including GST, but Jersey is still a comparatively low-tax jurisdiction.
‘We have a strategic plan for economic growth and we have to stick to the policy,’ added the minister.
‘We are very reliant on the financial services sector, but we are encouraging new sectors and hospitality is increasing.
Senator Ozouf added that the figures were ‘very positive’ and showed that Jersey was ‘ending this economic crisis’.
‘I don’t think anybody could have predicted a couple of years ago the scale of the resurging profits,’ he added.
‘What is encouraging is that the financial service sector has really grown incredibly strongly.
‘There has been a very significant resurgence.’
