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

June 5, 2019

Preview Citation

Format: Chicago

Kingdom of the Netherlands - Aruba: 2019 Article IV Consultation Discussions-Press Release and Staff Report, (USA: International Monetary Fund, 2019) accessed November 21, 2024

Summary

This 2019 Article IV Consultation highlights that Aruba’s economic recovery continues, although at a slowing pace. The authorities have managed well the impact of the crisis in Venezuela through diversification of product markets and tourism sources. Nonetheless, a deepening of the crisis is a downside risk—mainly through a potentially sizable influx of immigrants and refugees. It is recommended to identify additional reform measures to achieve Aruba’s fiscal targets. These measures should involve a mix of revenue increases and expenditure restraint, and be prioritized, sequenced, equitable, and well-communicated 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

Publication Details

Pages:

69
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2019/148
Stock No:

1ABWEA2019001
ISBN:

9781498318006
ISSN:

1934-7685

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