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

International Monetary Fund

No 2019/148, IMF Staff Country Reports from International Monetary Fund

Abstract: 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.

Keywords: ISCR; CR; Aruba; GDP; article IV consultation discussion; discussion; Last Article IV consultation discussion; government finance statistics; central bank; IMF staff estimate; money market rate; Tourism; Fiscal consolidation; Caribbean (search for similar items in EconPapers)
Pages: 69
Date: 2019-06-05
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