Three cruise ships visited Oranjestad on Tuesday. (Aruba government photo)
ORANJESTAD--As tourism continued to recuperate with more than 10,000 cruise tourists visiting Aruba on Tuesday, Central Bank of Aruba reported that during the first quarter of 2022, the island’s economy grew by an estimated 16.2%, compared to the corresponding quarter of 2021.
The more than 10,000 visitors came on different cruise ships, including Allure of the Seas of Royal Caribbean Cruise Lines and Carnival Cruise Lines. Minister of Tourism and Public Health Dangui Oduber said that these visits showed that Aruba was recuperating and progressing, despite it being low season.
The figures released by Central Bank of Aruba (CBA) confirmed that the economy was in recovery. The 16.2% growth in the first quarter of this year was mainly spurred by a strong rebound in the tourism sector. Aruba’s gross domestic product (GDP) growth has kept its upward trajectory since the second quarter of 2021.
According to CBA, the surge in tourism activities was reflected in a jump in total stay-over visitors and total visitor nights, leading to buoyant developments in the tourism services sector and total tourism revenue.
Aruba received a total of 233,666 visitors in the first quarter of this year, an increase of 108% compared to the first quarter of 2021. Total visitor nights almost doubled compared to the first quarter of 2021, reaching 1,828,141 nights.
The higher hotel occupancy rate of 62.2% and a spike in the average daily rate to US $355.30 led to a significant increase of 161.7% in the revenue per available room during the first quarter of 2022. Over the same period, total tourism revenue soared by 92% to Afl. 874.8 million.
During the first quarter of 2022, almost all consumption-related indicators showed improvement compared to the same period of 2021, signifying a continued economic recovery. Revenue from turnover tax (+33.3%) and taxes on commodities (+30.4%), total value of merchandise imports (+40.3%) and the number of
I-Pago transactions (+41.6%) surged in response to the increased demand brought on by the buoyant tourism performance, CBA stated.
Furthermore, household water consumption and employment showed accelerated growth, while household electricity consumption rebounded. At the same time, Arubans became a bit more hesitant to take out a loan: there was a drop of 3.6% in personal loans and 6.5% in car loans.
Even though at a relatively slower pace compared to other countries, inflation in Aruba has been trending upwards since the beginning of 2021. Compared to March 2021, inflation stood at 4% at the end of March 2022.
Government’s financial deficit went down to Afl. 52 million in the first quarter of 2022, while the total government revenue increased by Afl. 48.2 million, reaching Afl. 271.2 million at the end of the first quarter of this year. However, total revenue still remained below the 2019 first-quarter level by 10.4%.
The total government expenditure contracted by Afl. 63.5 million to Afl. 319.7 million, mainly because of a decrease in transfers and subsidies and in transfers to General Health Insurance AZV.
Aruba’s national debt keeps growing and increased sharply due to the loans that the Dutch government made available during the COVID-19 pandemic. At the end of the first quarter of 2022, the government debt rose by Afl. 360.2 million, reaching Afl. 6,015.8 million, representing a growth of 6.4% when compared to December 2021.
The developments in government debt resulted in an estimated debt-to-GDP ratio of 103.3% at the end of the first quarter of 2022. “Although the liquidity support from the Netherlands facilitated short-term government financial operations and obligations, these additional loans further exacerbated the government’s limited fiscal space,” CBA stated.
