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Friday 9 OctOber 2020 LOCAL
A10

The extent of the economic recession dependent on tourism resilience

ORANJESTAD — The Centrale Bank rently projected to contract be-

van Aruba (CBA) published an tween 25.4 percent (Scenario A:
update to the Economic Outlook no significant tourism activity for 3

for 2020. months) and 32.3 percent (Scenar-
io C: no significant tourism activity
Based on available data and con- for 9 months), compared to an es-
sidering the significant level of un- timated growth of 2.8 percent in
certainty regarding the COVID-19 a scenario where, among other
pandemic and its impact on things, the pandemic would not

economic recovery, the CBA up- have occurred. The revised fore-
dated its estimates for the eco- casted economic contraction is

nomic output based on different the result of a deep drop in tourist

scenarios for the year 2020. This arrivals, private consumption (and
update follows new information related imports), and, in scenarios

on public consumption and the B and C, investment.
expectations regarding the re-
covery of the tourism sector. More The 12-month average inflation

specifically, public consumption rate for 2020 in the various sce-
was adjusted downwards to narios is estimated at 1.4 per-

more accurately reflect actual cent. This is significantly lower than
government consumption in the the 4.3 percent recorded in 2019.
respective scenarios. In addition, The expected lower rate of infla-
a slower recovery of tourism activ- tion results from the decrease in
ity is assumed in comparison to the electricity tariffs as of January 1, compensated by reduced services es) is projected to reach a level

previous forecast (of July 2020). 2020, as well as the assumption payments, and lower income and between Afl. 2,151.8 million and Afl.
of lower stable oil prices, and no current transfer outflows. 2,505.2 million in 2020. The forecast-
Due to measures to protect hu- tax increases. Potential price ef- ed increase in 2020 is due mainly
man lives from the COVID-19 fects from a decrease in demand The capital and financial account to an expected increase in gov-
pandemic, the Aruban economy due to the pandemic were not is expected to record a significant ernment foreign borrowing, as well
continues to be severely affected taken into account. The latter im- surplus in all scenarios in 2020. This as a sharp drop in imports, which
despite the reopening of our bor- plies that the inflationary pressures is due to the surge in the fiscal defi- compensates for the deterioration
ders to tourism and travel. The could even be lower. cit, which is expected to cause in the current account due to the
depth and extent of the economic substantial foreign government steep decline in tourism demand.
crisis depend largely upon the du- The significant drop and lagging borrowing. The latter would com- NFA are estimated in all scenarios
ration of the COVID-19 pandemic recovery in tourism activity causes pensate for a slowdown in incom- to remain above the minimum re-
and the subsequent tourism re- a large current account deficit in ing investment flows as several in- quired current account coverage
covery trajectory in addition 2020 in all scenarios. The deficit is vestment projects would undergo ratio of three months in 2020.

to future government financ- partially offset by a slump in imports delays.
ing arrangements. Consequently, resulting from a decline in both The complete publication is avail-

for 2020 the real Gross Domestic domestic and tourism demand. The level of net foreign assets able on the CBA’s website (www.
Product (GDP) for Aruba is cur- The loss in tourism credits is further (excluding revaluation differenc- cbaruba.org). q
New helicopter for the marines

SAVANETA — HNLMS Groningen The NH90 has been prepared for
will have access to an NH90 mari- air transport at Eindhoven Air Base
time combat helicopter again after in recent days. The aircraft was al-
two and a half months. This morn- ready loaded into a C-17 transport
ing a plane took off by air to the aircraft yesterday. That aircraft is
Caribbean. The helicopter replac- one of the three aircraft of the joint
es the one that crashed in July. NATO Heavy Airlift Wing program.
It is not uncommon for Defense to

fly in helicopters by air transport. there for coastguard duties, res-
Normally, the aircraft sails on the cue operations, counter-drug op-
patrol vessel that goes to the de- erations and providing emergency
ployment area, but because of the aid. The NH90 provides support.
pilot, the substitute crew has devi- The previous plane crashed into
ated from this. the sea off the coast of Aruba on
July 19. Two crew members were
Station ship killed, two others survived the
HNLMS Groningen has been active crash. The replacement of the de-
as a station ship in the Caribbean vice was already on the agenda
since July 2020. The ship is used for that incident.q