Economic growth went from weak (2017) to broadly positive (2019). Every two years a financial and economic evaluation is done by the IMF, the so called Article 4 Mission. IMF delegates were on Aruba for two weeks and met with all sectors; public, private, NGO’s, Government and opposition members.
On Monday April 1, 2019, the IMF published the “Concluding statement” of their visit, where they anticipate a real economic growth of 0.7%, equivalent to 2.4% nominal growth, while the Government has only a 1% nominal growth included in their budget.
The IMF is optimistic that the Aruban economy will grow more than anticipated.
For the years after 2019, the IMF assesses a real economic growth of 1.1%, equivalent to a 3% nominal growth, which is again higher than what the Government has projected.
The IMF was also positive with the financial economic plan to restructure the public finances, including the fiscal reform.
According to the IMF, inflation over the last year reached 3.6% due to the increase in fuel prices and the crisis tax introduced last year. The IMF also projects a reduced inflation of 1.7% for this year.
The biggest threat is the current situation in Venezuela, although Aruba has managed to absorb the crisis partially to avoid being affected by Venezuela by importing produce from other countries. Venezuelan tourists have been replaced by tourists from other countries.
To summarize the IMF concludes and recommends:
- The fiscal reform and the steps taken to restructure the financial situation is positive. Government personnel costs and AZV spending should also be addressed.
- The economic management and the six promising sectors improve the evaluation of Aruba within their diversification of tourism, agriculture etc. The IMF is also pleased with the plans to improve the “ease of doing business”.
- Tourism is growing and needs to be diversified. They recommend to keep focusing on maintaining of the high quality service.
- Infrastructure investments are positive.
- Safety and our legal system are the main factors to attract investors. Social aspects should be considered.
- Make sure the education is synced with the labor market, to provide vocational training to students and offer better job protection
- The IMF encourages the Government to proceed with the plans to fight corruption.
- The IMF is positive on the progress made by the national accounts with data and statistics.