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a32 local
Tuesday 9 June 2020

Central bank of Aruba:

Lackluster consumption weighs down good performance in

tourism and investment during 2019

ORANJESTAD — Today the Centrale Bank van was partially offset by an Afl. 63.7 million drop
Aruba (CBA) published the State of the Econo- in net foreign assets. The contraction in net for-
my of 2019. This publication provides a synopsis eign assets was mainly related to domestically
of the local and international economic devel- financed repayments of foreign private loans
opments of this period. The domestic highlights and the repurchases of equity from nonresi-
are presented below, including a summary of dents.
main economic indicators.
Improvement in the fiscal deficit
Economic contraction in 2019 The government of Aruba recorded a fiscal
Aruba’s economy is estimated to have con- deficit (on a cash basis) of Afl. 3.1 million or 0.1
tracted by 0.7 percent in real terms in 2019, ments recorded an Afl. 115.4 million surplus percent of GDP in 2019, reflecting an improve-
according to the latest Economic Outlook during 2019. This surplus was a substantial turn- ment of Afl. 42.1 million compared to a year
publication of the CBA. The slow-down in the around compared to 2018, when an Afl. 38.9 earlier. The narrowing of the fiscal deficit was
economy was mostly driven by a further slack million deficit was recorded. This positive devel- due to a 7.9 percent increase of in govern-
in the consumption component. Consumption opment was mainly related to the strong perfor- ment revenue, pushed up by gains in both tax
indicators such as banking credit and car sales mance in the tourist sector that pushed up the and non-tax revenue. The higher government
pointed towards a decline. Available data in- surplus on the services account by 3.9 percent, revenue was partially offset by a 4.8 percent
dicated positive results in the tourism sector combined with a smaller deficit on the income uptick in government expenditure. The latter
for the year, while investment data showed a account. was mainly caused by higher outlays on goods
pick-up in investment activities. Tourism related The financial account resulted in a net lending and services. Consequently, government debt
activities remained strong, as available data abroad of Afl. 104.8 million in 2019, compared reached Afl. 4,318.3 million at the end of 2019,
on stay-over visitors (both including and exclud- to a net borrowing of Afl. 44.2 million in the pre- up Afl. 19.2 million from 2018. Meanwhile, the
ing Venezuela) showed further gains, with the vious year. estimated year-end debt-to-GDP ratio fell from
average length of stay remaining relatively un- Total money supply stood at Afl. 4,569.4 million 75.0 percent at end-2018 to 72.9 percent at
changed. at year-end 2019, a growth of Afl. 191.8 million end-2019.
compared to December 2018. The expansion
Increase in consumer price inflation and trade in money supply was the result of an Afl. 255.4 The complete publication is available on the
deficit million increase in net domestic assets, which CBA’s website (www.cbaruba.org).q
The 12-month average CPI inflation accelerat-
ed from 3.6 percent at end-December 2018 to
4.3 percent in December 2019, caused primar-
ily by rising food- and communication prices.
The real exchange rate of the florin vis-à-vis the
U.S. dollar increased steadily since the first quar-
ter of 2018.
Aruba’s trade deficit, as reported by the CBS
reached Afl. 2,199.1 million in December 2019,
i.e., a widening of Afl. 72.4 million (+3.4 percent)
compared to December 2018. The attributing
factors are increased imports of construction
related materials.

Surplus on the balance of payments
The current account of the balance of pay-

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