Kingdom of the Netherlands - Aruba: 2019 Article IV Consultation Discussions-Press Release and Staff Report

IMF Staff Country Reports, June 5, 2019

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Canonical URL: Kingdom of the Netherlands - Aruba: 2019 Article IV Consultation Discussions-Press Release and Staff Report

Economic recovery in Aruba continues, although at a slowing pace.
Authorities managed well the impact of the crisis in Venezuela through diversification of product markets and tourism sources.
A deepening of the crisis in Venezuela is identified as a downside risk—mainly through a potentially sizable influx of immigrants and refugees.

Recovery persists but is slowing.
Main downside risk: deepening Venezuelan crisis with potential sizable influx of immigrants and refugees.
Diversification of product markets and tourism sources has mitigated direct impacts to date.

It is recommended to identify additional reform measures to achieve Aruba’s fiscal targets.
Recommended measures should:
- involve a mix of revenue increases and expenditure restraint,
- be prioritized, sequenced, equitable, and well-communicated,
- be designed to minimize implementation risks and ensure the measures’ durability.
The government devised a reform agenda with fiscal consolidation as a key pillar.
Additional measures are needed to achieve the authorities’ fiscal targets.
The additional adjustment should contain a mix of tax reforms and expenditure rationalization.
The fiscal measures in 2019 are expected to deliver a large upfront increase in revenues but it will be important to strike a balance between revenue increases and expenditure restraint in subsequent years.

Subject: Economic sectors, Expenditure, Fiscal consolidation, Fiscal policy, Public debt, Revenue administration, Tourism
Keywords: article IV consultation discussion, Aruba, Caribbean, central bank, CR, discussion, Fiscal consolidation, GDP, government finance statistics, IMF staff estimate, ISCR, Last Article IV consultation discussion, money market rate, Tourism