National income has fallen again.

Gross Domestic Product (GDP) fell by 2.5% in real terms in 2023-24, following a 5% drop the year before.

However, Gross National Product (GNP), which includes net income earned from abroad, saw an increase of 7.8% after three years in negative territory.

In October, Treasury Minister Dr Alex Allinson insisted there was no evidence that the Isle of Man is in recession despite the figures indicating the island’s economy has shrunk in real terms.

Speaking at that month’s Tynwald sitting, fellow Ramsey MHK Lawrie Hooper suggested that the data from the most recent national income report - for 2022-23 - were not signs of a ‘healthy, well-functioning economy’.

Now the government has published the national income figures for 2023-24 which shows that total GDP increased from £5.80bn to £5.84bn.

But Treasury said there had been strong inflation during that year and significant global uncertainty put negative pressure on real economic growth.

Referring to the overall decrease in GDP of 2.5% and 7.8% increase in GNP, it said both measures can be affected by corporate structuring and financial flows which can lead to large swings in the figures.

The report shows almost half of all sectors in the Manx economy showed real growth, including key sectors such as banking which saw an increase of 11%.

But significant sectors saw decline including Information and Communication Technology which was down 39% at constant prices, while engineering fell 16%, corporate service providers were down 13% and construction dropped by 12%.

Insurance continues to be the largest sector of the economy, accounting for 16.9% of national income in 2023-24, with e-gaming (14.2%), professional services (13.8%), other finance and business services (10.2%), and banking (8.6%) making up the top five.

Corporate Income makes up a significant proportion of Isle of Man GDP.

But the Treasury said this is not the best measure of residents’ prosperity due to the limited corporation tax.

It said personal Income (which comprises salaries and dividends paid to local residents) is a better measure, and showed growth of +3.3% in 2023-24, which more than reversed the decrease in 2022-23.

Treasury Minister Dr Allinson said: ‘There has been considerable work carried out by government over the past few years to work with key sectors to understand their needs for skilled workers and enable economic growth within our diversified economy.’

An update by ratings agency Moody’s last week saw the island’s credit rating and outlook remain at Aa3 stable, the same as the UK.

It forecast that GDP growth will remain robust, recording 2.5% in 2025 and stabilising to 3% in the medium term. The island’s real GDP growth has averaged an estimated 1% per year between 2014 and 2024.

But Moody’s estimated real GDP growth in 2023 as 1.5% when at the latest national income report shows, it was down 5% - and it estimated growth of 2.5% in 2024 when the actual figure was minus 2.5%.