Treasury Minister Dr Alex Allinson says the Isle of Man has experienced a slowdown in economic activity.

He was commenting after the latest national income data showed gross domestic product (GDP) has fallen for a second consecutive year, dropping 2.5% in real terms in 2023-24, and by 5% the year before.

However, gross national product (GNP), which includes net income earned from abroad, recorded an increase of 7.8% after three years in negative territory.

Most commentators and analysts define a recession as two consecutive quarters of decline in real (inflation-adjusted) GDP, but Dr Allinson said there was no evidence of a recession.

He said: ‘Looking at broader economic measures over the period covered by the most recent report, the island has not seen an increase in unemployment and, in fact, there has been growth in the number of people in work.

‘Meanwhile, personal incomes have mostly held steady or grown in real terms.’

However, he added: ‘More recently, we have probably seen a slowdown, but not necessarily a decline, in economic activity due to external pressures from global economic instability and political uncertainty.

‘But we have still seen strong tax receipts that are indicative of personal income growth.

‘Obviously, going forward there will be concern that this slowing economic activity may start to influence personal incomes, which is the incentive for government to launch the recent initiatives around refreshing the economic strategy through increased dialogue with representatives from key economic sectors.’

Plans are already under way through the 2026 Budget to increase household incomes, he said, and the Chief Minister has also committed to introduce further support measures to strengthen the island’s local economy.

Dr Allinson said government ambitions to encourage and enable an increase in the active working population through economic growth would contribute to further increases in GDP.