## Kingdom of the Netherlands-Aruba: Technical Assistance Report; Options for a New Rules-Based Fiscal Framework

_Technical Assistance Reports, March 28, 2025_

## Source details

**Canonical URL:** [Kingdom of the Netherlands-Aruba: Technical Assistance Report; Options for a New Rules-Based Fiscal Framework](https://www.imf.org/en/publications/technical-assistance-reports/issues/2025/03/28/kingdom-of-the-netherlands-aruba-technical-assistance-report-options-for-a-new-rules-based-565586)

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## Bibliographic details
- Published: March 28, 2025
- Series: Technical Assistance Reports
- DOI: https://doi.org/10.5089/9798229006194.019

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### Mission details and scope
- TA mission on Fiscal Rules conducted from October 31 to November 12, 2024.
- Subject areas: Budget planning and preparation; Expenditure; Fiscal policy; Fiscal rules; Fiscal stance; Public debt; Public financial management (PFM).
- Keywords listed: Aruba; Aruba negotiation committee; Aruban authorities; Budget planning and preparation; Capacity Development; Caribbean; Debt-to-GDP ratio evolution; expenditure rule; Fiscal Council; Fiscal Policy; Fiscal Rules; Fiscal stance; Forecasting and Other Model Applications.; Global; IMF team; Technical Assistance.

### Historical debt evolution and challenge
- Debt surge following the 2008 Global Financial Crisis to "over 70 percent of GDP."
- COVID-19 pandemic pushed debt to "112.3 percent" in 2020.
- Aruba aims to reduce public debt to "50 percent of GDP by 2040" through fiscal tightening and revised fiscal rules.
- Economic context: heavy reliance on tourism, making public debt management crucial for Aruba.

### Key findings
- Public debt management is crucial given Aruba's economic reliance on tourism.
- Historical shocks (2008 Global Financial Crisis and COVID-19) led to large increases in debt levels.
- Current debt trajectory requires policy adjustments to restore fiscal sustainability and resilience.

### Main recommendations and policy options
- Simplify fiscal rules.
- Implement a Medium-Term Fiscal Framework (MTFF).
- Enhance institutional capacity for effective fiscal management, including strengthening forecasting and public financial management practices.
- Use fiscal tightening as part of the strategy to reach the 50 percent of GDP debt target by 2040.

### Implementation and institutional emphasis
- Strengthen institutional capacity to support the MTFF and enforcement of simplified fiscal rules.
- Improve forecasting and modeling capabilities to underpin fiscal planning and the fiscal stance.
- Consider institutional arrangements such as a Fiscal Council (as referenced among keywords) to support rule adherence and transparency.

### Publication and document metadata
- Pages: 60
- Volume: 2025
- Issue: 030
- Series: Technical Assistance Report No. 2025/030
- DOI: https://doi.org/10.5089/9798229006194.019
- Stock No: TAREA2025030
- ISBN: 9798229006194
- ISSN: 3005-4575
- Publication date on landing page: March 28, 2025

*International Monetary Fund. Fiscal Affairs Dept. "Kingdom of the Netherlands-Aruba: Technical Assistance Report; Options for a New Rules-Based Fiscal Framework", Technical Assistance Reports 2025, 030 (2025).*

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_Source: https://www.imf.org/en/publications/technical-assistance-reports/issues/2025/03/28/kingdom-of-the-netherlands-aruba-technical-assistance-report-options-for-a-new-rules-based-565586_