Gibraltar: Economy

In this Section:

- Gibraltar the Country and its Economy
- Gibraltar Executive Summary
- Gibraltar the Island of Gibraltar
- Gibraltar Services Directory
- Gibraltar Map of Gibraltar

The Economy of Gibraltar

The economy used to be substantially dominated by the British naval dockyard and military presence, but major cut-backs over the last few decades have reduced the share of such expenditure to a small fraction of the local economy. Magnificent port facilities remain, so that shipping and tourism are the mainstays of the economy. Several million people visit Gibraltar annually, many of them evidently stepping ashore from cruise liners (see below for recent visitor numbers). There is a fair amount of local construction work on the hotel/conferencing sector, and to accommodate wealthy expatriates.

The Government has primarily, however, pinned its hopes for the future on the financial services sector, which has been growing rapidly. Growth in the technology sector is also promising, with a number of large betting and gaming companies taking advantage of the low-tax regime and good telecommunications facilities.

The currency is the Gibraltar pound (£G) = 100 pence and is at par with the British pound. There are no exchange controls in Gibraltar.

Chief minister Peter Caruana's 2009 budget speech revealed the economy grew by 8.8% in 2007/8 to GIP804m. In the year to March 2009 the economy was estimated to have grown by nearly 6% to GIP850m. He said that the Net Public Debt fell to 7.5% of GDP in 2008 while the government had an overall budget surplus of GBP15 million for 2008/2009. overall revenue was GIP304m. Overall expenditure was GIP289m.

Revenue from personal and Company Tax, Gaming taxes and Social Insurance contributions and import duties rose to record levels, despite the global economic downturn, Caruana said.

Inflation held steady at 2.8% in 2008.

The 2010 budget speech included the fact that government surplus of GIP29.7 million was a record for the second year running. GDP was expected to be 5%, unemployment remained steady at 2009 figures. Net public debt doubled to from 7.5% to 15.2% in the year ended March 2010 and a further increase to 19% is expected - well below the ceiling of 60% recommended by the EU.

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Gibraltar Investments by Foreigners

Foreign investment in Gibraltar is actively promoted by the government largely to create job opportunites. Tax concessions have traditionally been governed by The Development Aid Ordinance. Concessions have usually been available to light manufacturers who intend to export from Gibraltar, with any corporation with a development aid license granted by the governor for a project that will benefit Gibraltar's economy exempted from paying income tax on profit earned from the development until the total gains from the development exceed the percentage of approved capital expenditure.

To qualify for a license, projects are usually required to provide at least two housing units in Gibraltar; create new industry; provide a material and immovable asset in Gibraltar; develop the tourist industry; provide new employment opportunities or tangibly enhance the economic or financial infrastructure of Gibraltar.

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