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Saturday 7 May 2022 locAl
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Real economic growth in 2021 driven by strong tourism recovery

ORanjestad - today the
Centrale Bank van aruba
(CBa) published the state
of the economy for the
fourth quarter of 2021. this
publication provides a syn-
opsis of the local and in-
ternational economic de-
velopments of this period.
the domestic highlights are
presented below.

strong rebound of the aru-
ban economy during 2021
During 2021, the Aruban
economy grew by an esti-
mated 17.9 percent, after
contracting by 22.3 per-
cent in 2020. On the out-
put level, however, eco-
nomic activities in 2021
remained below that of
2019. The aforementioned
growth was driven mainly over visitors strenghtened in 2021, while government ascent to 62.7 percent of The 12-month average
by the strong recovery in by 72.1 percent in 2019 debt expanded total debt. The share of for- inflation rate, on the rise
stay-over visitors and their terms. Total visitor nights in On the fiscal side, the fi- eign government debt rose since May 2021, reached
spending. Another key driv- 2021 more than doubled nancial deficit for 2021 (Afl. continuously as of the sec- 0.7 percent at the end of
er of growth was domestic compared to 2020 (Table 475.2 million) narrowed ond quarter of 2020, when December 2021. Nonethe-
consumption, which was 1). Revenue per available compared to 2020 (Afl. the government of Aruba less, consumer prices in the
sustained by government room surged by 141.9 per- 813.6 million). This relatively began receiving short-term USA rose faster than those
support measures, such as cent in 2021 compared to smaller deficit was a reflec- loans from the Netherlands in Aruba, particularly due
the Emergency Social Assis- 2020, pushed up by the tion of the economic re- as liquidity support. The es- to the fact that utility prices
tance Fund (FASE), as well higher hotel occupancy covery gaining momentum timated debt-to-GDP ratio stayed unchanged, creat-
as the wage subsidy pro- rate in 2021. The hotel oc- as of the second quarter stood at 108.7 percent at ing an improved competi-
gram. While the estimated cupancy rate practically of 2021. While government the end of 2021, down from tive position for Aruba com-
GDP for the first quarter increased twofold from revenues inched up in 2021 114.9 percent in 2020. pared to the United States
of 2021 declined, the fol- 34.9 percent in 2020 to compared to 2020, the of America.
lowing quarters of 2021 69.0 percent in 2021. Tour- government expenditures Inflation in Aruba is trend-
showed signs of robust re- ism credits jumped by 71.5 declined by 16.9 percent in ing up International and official
bound compared to the percent in 2021 compared 2021 compared to the pre- Higher gasoline prices on reserves remained ad-
year before, rising more to 2020, reaching a level vious year. the international market equate conform the moni-
than 30 percent in each of Afl. 2,594.4 million at the Government debt expand- caused inflation to trend tored benchmarks
subsequent quarter. end of 2021. Cruise tourism ed by Afl. 506.8 million to up during 2021. At the The level of international
to Aruba in 2021, however, Afl. 5,652.5 million at the end of the fourth quarter and official reserves was
tourism performed well in significantly lagged behind end of 2021 compared to of 2021, the end-of-period again adequate in 2021,
2021, but remained below the low performance dis- December 2020, as the inflation in Aruba rose by according to the bench-
pre-pandemic levels played in 2020, as the first debt burden continued to 3.6 percent compared to marks monitored by the
Stay-over arrivals regained cruise ship to arrive in Aruba grow due to the COVID-19 the fourth quarter of 2020 CBA. International reserves
growth in 2021, but did not docked on June 9, 2021. pandemic. The share of for- (Chart 2). The end-of-peri- (incl. revaluation differenc-
reach pre-pandemic lev- eign government debt in od inflation started to flare es) grew to Afl. 3,130.6mil-
els. In 2021, numbers of stay- Financial deficit narrowed 2021 continued its steady up as of December 2020. lion in 2021 (+Afl. 776.8
million) compared to end-
2020 (Chart 3). The main
contributors of the gain
in international reserves
throughout 2021 were the
short-term loans that were
provided by the Dutch
government to the Govern-
ment of Aruba to cover its
large liquidity needs. These
loans were complemented
by recovered foreign ex-
change inflows related to
tourism services.

The complete publication
is available on the CBA’s
website (https://www.cba-
ruba.org/document/state-
of-the-economy).q