ARUBA RECENT ECONOMIC DEVELOPMENTS AND OUTLOOK Presented by Jane R. Semeleer President Centrale Bank van Aruba May 30, 2011
STRUCTURE 1. National economy 2. International economy 3. Outlook 2
CENTRALE BANK VAN ARUBA 1. National economy 3
Turnover tax (BBO) revenue Nominal* 9 8 7 6 2009 2010 2011 5 March 2011: Afl. 7.4 million (Δ +Afl. 0.8 million or +12.9 percent) Year to date (Feb11 Apr11): Afl. 21.4 million (Δ +Afl. 2.0 million or +10.3 percent) In part due to tourism * Corrected for the rate reduction as of January 2010 and incidental receipts 4
Wage tax revenue Nominal 27.5 25.0 22.5 20.0 17.5 2009 2010 2011 15.0 March 2011: Afl. 18.5 million (Δ +Afl. 2.5 million or +16.0 percent) Year to date: Afl. 83.6 million (Δ +Afl. 8.8 million or +11.8 percent) 5
10.0 12 month average Inflation 2011: April: 0.8 percent, 0.2 percentage point higher than in 2010 In percent 5.0 0.0 5.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec April 2011: Electricity, gas and other fuel: +0.6 Actual rentals for housing: +0.5 Operations of personal transport equipment: +0.4 Clothing: 0.4 Purchase of vehicle: 0.2 Food: 0.1 6
In percent 10.0 5.0 0.0 5.0 End of period Jan Feb Mar Apr May Jun Inflation Jul Aug Sep Oct Nov Dec 2011: April: 3.5 percent, 1.6 percentage points lower than in 2010 April 2011: Operations of personal transport equipment: +1.2 (Gasoline +1.1; Diesel +0.1) Electricity, gas and other fuel: +0.9 Actual rentals for housing: +0.5 Water supply and miscellaneous services relating to the dwelling: +0.3 Food: +0.3 7
Core inflation (12 months) In percent 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 0.5 1.0 Excluding food & energy January April 2011: On average 2.0 percentage points lower than in 2010 April 2011: 0.4 percent 8
Tourism In thousand 85 80 75 70 65 60 55 50 Stay over visitors In thousand Cumulative percentage change Cumulative percentage change Jan Jan Apr 2011: +5.3 percent (= 1,215 Oct 2010: +5.2 percent more visitors) 9 650 625 600 575 550 525 500 475 450 425 400 Visitors nights 2008 2009 2010
Tourism 90 Occupancy rate 475 Average daily rate 85 425 In percent 80 75 In Afl. 375 325 70 275 65 225 2008 2009 2010 2008 2009 2010 Occupancy rate increased by 2.1 percentage points to 78.4 percent (Jan Aug 2010) ADR went down by Afl. 3.70 or 1.5 percenttoafl.319.42(jan Aug 2010) 10
Tourism In Afl. 240 220 200 180 160 140 120 100 80 Revenue per available room 2008 2009 2010 7.0 6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 Nominal hotel room tax revenue/ Hotel levy RevPar grew by Afl. 7.67 or 5.5 percent to Afl. 147.44 (Jan Aug 2010) Hotel room tax went up by Afl. 9.3 million or 60.7 percent (Jan Apr 2011) 11
Tourism 125 Cruise visitors 730 Tourism receipts 100 680 In thousand 75 50 25 In Afl. 630 580 530 0 480 I II III IV 2008 2009 2010 January April 2011 change: +13.0 percent (= 40,634 more passengers compared to 2010) January December 2011 change: Afl. +49.6 million or +2.3 percent 12
Tourism s 220 195 170 145 120 Tourism receipts (Commercial banks and CBA) March 2011: +Afl. 16.2 million or +8.5 percent, compared to March 2010 Year to date 2011: +Afl. 33.4 million or +6.1 percent (compared to the same period of 2010). 13
2. INTERNATIONAL ECONOMY Caribbean 30 Growth in stay over and cruise tourism in 2010 in selected Caribbean countries and the Caribbean as a whole (percentage change) Cancun & Cozumel 20 St. Martin Bahamas Cruise tourism 10 Barbados Caribbean 0 30 25 20 15 10 5 0 5 10 15 20 25 30 ArubaJamaica 10 20 Curacao 30 Stay over tourism 14
Utilities 630 Water consumption (household) 30 Electricity consumption (household) 610 28 In thousand m 3 590 570 550 530 In million KWh 26 24 22 510 20 490 470 18 15
Utilities 970 Gas consumption (household) 1,570 Container transport In thousand m 3 920 870 820 770 720 670 620 570 520 In quantity of containers 1,470 1,370 1,270 1,170 1,070 970 470 870 16
Utilities 270 Gasoline price 220 Diesel price 250 210 200 In cents per liter 230 210 190 170 In cents per liter 190 180 170 160 150 150 140 130 130 120 17
Oil 1,600 Export of refined oil 2,000 Import of crude oil 1,400 1,750 1,200 1,500 1,000 800 600 400 1,250 1,000 750 500 250 200 0 I II III IV 0 250 I II III IV 18
Construction 310 Number of construction permits granted 450 Value of construction permits granted 290 400 270 250 230 210 190 170 350 300 250 200 150 100 50 150 I II III IV 0 I II III IV 2008 2009 2010 2008 2009 2010 19
Construction Total cement imported Value of construction permits granted 22,500 750 20,500 700 18,500 650 In thousand Kg 16,500 14,500 12,500 10,500 8,500 6,500 600 550 500 450 400 350 4,500 I II III IV 300 I II III IV 2008 2009 2010 2008 2009 2010 20
3,300 3,200 3,100 3,000 Monetary developments Net domestic assets Money supply 2,000 1,900 1,800 1,700 1,600 2,900 1,500 April 2011 December 2010: +Afl. 78.1 million or +2.5 percent April 2011 December 2010: +Afl. 42.9 million or +2.3 percent 21
Monetary developments 1,600 1,500 1,400 Net foreign assets April 2011 December 2010: +Afl. 35.2 million or +2.7 percent 1,300 22
Monetary developments 15 Net foreign assets 10 In percent 5 0 5 10 I II III IV I II III IV I 23
Monetary developments 2,850 Total credit according to CMR 2,800 2,750 2,700 2,650 2,600 Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11 Apr 11 Table: credit growth in percentages 2010 2011 Nov Dec Jan Feb Mar Apr Business loans 0.3 0.5 0.6 0.3 1.2 1.8 Housing mortgages 5.2 5.7 0.7 0.9 1.1 1.9 Consumer credit 2.6 3.1 1.2 1.3 2.2 2.1 Overall credit 6.8 6.1 0.3 0.0 0.6 0.9 Excl. government bonds 1.6 1.4 April 2011 December 2010: Afl. 24.3 million or 0.9 percent 24
Monetary developments 1,125 1,100 1,075 1,050 Commercial loans 890 880 870 860 850 840 830 820 810 800 790 780 Housing mortgages April 2011 December 2010: Afl. 19.5 million or 1.8 percent April 2011 December 2010: +Afl. 9.8 million or +1.1 percent 25
Monetary developments Consumer credit Car loans 620 210 610 200 600 590 190 180 580 170 570 160 April 2011 December 2010: Afl. 12.1 million or 2.1 percent April 2011 December 2010: Afl. 0.1 million or 0.1 percent 26
Monetary developments Interest rates 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 In percent Jan 09 Feb 09 Mar 09 Apr 09 May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11 Apr 11 Weighted interest on deposits Weighted interest on loans Weighted interest on T bills Advance rate 27
Monetary developments Source: Caribbean Economic Performance Report, May 2011 CARIBBEAN CENTRE FOR MONEY AND FINANCE 28
Public finance 600 500 400 300 200 Government revenue and grants I II III IV 2008 2009 2010 January December: 2009: Afl. 1,108.9 million 2010: Afl. 1,183.8 million ( +Afl. 74.9 million or +6.8 percent, compared to the same period of 2009) Excl. Valero incidental receipt: Afl. 972.2 ( Afl. 122.4 million or 11.2 percent). This decline is more partly explained by an Afl. 87.9 million drop in the turnover tax, mainly as a consequence of the reduction of the BBO rate from 3 percent to 1.5 percent and to a lesser extent a decrease in economic activities. 29
Public finance 450 400 350 300 250 200 Government expenditure I II III IV 2008 2009 2010 January December: 2009: Afl. 1,229.1 million 2010: Afl. 1,358.3 million ( +Afl. 129.2 million or +10.5 percent, compared to the same period of 2009) Wages: +Afl. 19.7 million Goods and services: +Afl. 15.9 million Interest: +Afl. 10.5 million Transfer to AZV: +Afl. 28.1 million Items n.i.e.: +Afl. 58.0 million 30
Public finance 150 100 50 0 50 Government deficit ( ) January December: 2009: Afl. 163.1 million 2010: Afl. 210.0 million ( Afl. 46.9 million or 28.8 percent, compared to the same period of 2009) Excl. Valero incidental receipt: Afl. 411.6 ( Afl. 234.2 million or 132.0 percent) 100 150 I II III IV 2008 2009 2010 31
Public finance 200 150 100 50 0 50 Government deficit ( ) including change in unmet financial requirements January December: 2009: Afl. 161.6 million 2010: Afl. 187.4 million ( Afl. 25.8 million or 16.0 percent, compared to the same period of 2009) Excl. Valero incidental receipt: Afl. 399.0 ( Afl. 223.1 million or 126.8 percent) 100 150 I II III IV 2008 2009 2010 32
Public finance 2,400 Outstanding government debt (End of period) December: 2009: Afl. 2,222.9 million 2,350 2010: Afl. 2,377.8 million 2,300 2,250 2,200 2,150 ( +Afl. 109.5 million or +7.0 percent, compared to the same quarter 2009) In percent of GDP: December 2009: 49.6 percent 2,100 December 2010: 55.2 percent 2,050 2,000 2008 I 2008 II 2008 III 2008 IV 2009 I 2009 II 2009 III 2009 IV 2010 I 2010 II 2010 III 2010 IV ( +5.6 percentage points, compared to the same period of 2009) 33
Balance of payments 400 300 200 100 0 100 200 300 400 500 Current account total economy I II III IV January December: 2009: +Afl. 234.5 million 2010: Afl. 734.3 million ( Afl. 968.8 million compared to 2009) Goods: Afl. 1,074.6 million Services: +Afl. 168.5 million Income: Afl. 81.8 million Current transfers: +Afl. 19.0 million 2008 2009 2010 34
Balance of payments 800 700 600 500 400 300 200 100 0 100 200 Capital and financial account total economy I II III IV 2008 2009 2010 January December: 2009: Afl. 5.1 million 2010: +Afl. 561.8 million +Afl. 566.9 million compared to 2009: Capital account: Afl. 48.5 million Financial account: +Afl. 613.4 million Direct investment: +Afl. 151.8 million Portfolio investment: +Afl. 15.6 million Financial derivatives: +Afl. 1.7 million Other investment: +Afl. 444.4 million 35
Balance of payments 250 200 150 100 50 0 Current account Non oil sector January December: 2009: Afl. 20.3 million 2010: +Afl. 91.1 million +Afl. 111.4 million compared to 2009: Goods: +Afl. 131.6 million Services: +Afl. 52.9 million Income: Afl. 81.9 million Current transfers: +Afl. 8.7 million 50 100 150 I II III IV 2008 2009 2010 36
Balance of payments 350 300 250 200 150 100 50 0 50 100 150 Capital and financial account Non oil sector I II III IV 2008 2009 2010 January December: 2009: +Afl. 179.9 million 2010: Afl. 137.2 million Afl. 317.1 million compared to 2009: Capital account: Afl. 48.5 million Financial account: Afl. 268.6 million Direct investment: Afl. 195.2 million Portfolio investment: +Afl. 14.1 million Financial derivatives: +Afl. 1.7 million Other investment: Afl. 89.2 million 37
Balance of payments 300 250 200 150 100 50 0 50 100 150 Overall balance of payments I II III IV January December: 2009: +Afl. 206.2 million 2010: Afl. 167.0 million ( Afl. 373.2 million compared to the same period of 2009) Current account: Afl. 968.8 million Capital and financial account: +Afl. 564.8 million Items not yet classified: +Afl. 30.8 2008 2009 2010 38
Balance of payments 13 Merchandise coverage ratio (12 month average) 7 Current account coverage ratio (12 month average) 12 11 6 In months 10 9 8 In months 5 7 4 6 5 I II III IV 3 I II III IV 2008 2009 2010 2008 2009 2010 December: 2009: 11.3 months 2010: 12.4 months December: 2009: 5.9 months 2010: 6.3 months 39
CENTRALE BANK VAN ARUBA 2. International economy 40
2. INTERNATIONAL ECONOMY Caribbean 6 Real GDP growth of Caribbean countries 4 2 0 In percent 2 4 6 8 10 2009 2010 12 Aruba Bahamas Barbados Belize EC Currency Union Guyana Haiti Jamaica Netherland Antilles Suriname Trinidad & Tobago 41
2. INTERNATIONAL ECONOMY World 115 Oil prices (WTI) 2.80 Euro exchange rate (Period average) 2.70 In US$ per barrel 95 75 55 In Afl. 2.60 2.50 2.40 2.30 2.20 2.10 35 2011: April: +US$ 25.49 or +30.2 percent, compared to same period 2010 2.00 2011: April: +Afl. 0.18 or +7.7 percent, compared to same period 2010 42
2. INTERNATIONAL ECONOMY US economy 80 Consumer confidence 117 US index of leading economic indicators (2004=100) 75 112 70 Index 65 Index 107 60 102 55 50 97 April: 2010: 72.2 2011: 69.8 March: 2010: 109.4 2011: 114.1 43
CENTRALE BANK VAN ARUBA 3. Outlook 44
3. OUTLOOK Gross domestic product 15 10.7 Percentage change 10 5 0 5 7.3 1.0 8.9 3.8 2.8 8.9 10 15 11.0 2008 Nominal GDP Real GDP 45
3. OUTLOOK In thousand 113 111 109 107 107.4 Population 107.8 109.5 111.1 Percentage change 5.0 3.0 1.0 1.0 2.1 Inflation (12 month) 2.1 3.4 3.2 105 2012 3.0 2012 In percent of labor force 12.5 11.5 10.5 9.5 8.5 7.5 6.5 Unemployment 11.3 9.0 7.9 7.4 2012 In percentage points 2.0 1.0 0.0 1.0 2.0 Inflation differential with the USA 1.4 0.9 0.4 1.8 2012 46
3. OUTLOOK Stay over visitors Tourism nights 3.0 2.5 2.0 2.5 2.4 4 3 3.8 2.8 2.5 Percentage change 1.5 1.0 0.5 0.0 0.5 1.0 1.5 2.0 1.6 1.7 2012 Percentage change 2 1 0 1 2 1.5 2012 47
3. OUTLOOK 200 50 100 250 400 Government deficit ( ) Incl. changes in unmet financing requirements 183.4 159.6 187.4 2008 325.0 2,750 2,500 2,250 2,000 Government debt 2,702.8 2,377.8 2,222.9 2,049.7 2008 60 55 Government debt to GDP ratio 55.2 58.1 In percent 50 45 41.0 49.6 40 2008 48
CENTRALE BANK VAN ARUBA THANK YOU 49