**nfo**

**CBS**

As sure as the spring will follow the winter, prosperity and economic growth will follow recession.

Bo Bennett

3. Some specific indicators

Macro economic indicators:

what are the statistics telling us?

2. GDP per capita

Outline of the presentation

1. General development of the economy

Let’s start from the beginning...

... and dig up some statistics

Aruba’s growth has been on a downward slide…

The 5 year moving average Real GDP growth was as high as 12% in 1990 and is currently -2%

James Surowiecki

Obviously, there is a strong correlation between the price of electricity and the volume consumed by people

Consumption of water is also strongly influenced by its price

Time to be creative

With possibly increasing excise duties on imports and excise taxes, one need to:

diversify products (less luxury, incl. basic goods)

increase turnover (focus on new markets)

lower fixed costs (storage, energy use, personnel)

increase productivity (capital investment, automation,...)

**Central Burau of Statistics Aruba**

**Martijn Balkestein**

**+00297-5837433**

**cbs@setarnet.aw**

You can't fuel real economic growth with indiscriminate credit. You can only fuel it with well-allocated, long-term investment.

Aruba's challenge: rebuilding policy space, supporting recovery

**Like 2 get more?**

The road to economic

recovery

.... can be challenging

....or is maybe just around the corner

Till recently, Aruba had macro-economic stability

Aruba is a high income country ...

.... with low fiscal deficits

...moderate public indebtness,

.... and external imbalances in check

Real GDP

Development of nominal GDP 2000 – 2013

During 2000 – 2013 total growth was 38.7% or 2.6% per year (compounded growth)

During 2007 – 2013 total growth was -0.9%.

In nominal terms Aruba’s GDP in 2013 is projected to reach the level of 2007

Nominal GDP

Three cyclical periods:

2001-2003: 3-year lower cycle

2004-2008: 5-year higher cycle

2009-2013: 5-year lower cycle

Real GDP pa capita

If we compare 2013 with 2000 or 2007, we see a decline of 17%

Economic growth, since 1990

…what is Aruba’s collective aspiration for the following years?

Or

…what level of GDP can be achieved?

X

2013

2000

What does this mean

for every day life?

Average real GDP per capita

The 14-year average GDP per capita is about AFL 34,000 per year.

In 2013 Aruba is at a level of AFL 30,500 per year.

The fundamental questions

that arises are…

What does this mean for every day life?

This is of course a policy matter and subject to various developments beyond the island’s control as well…

…

…but still…

That means that if the average earning power in the year 2000 was enough to feed 6 persons (2 adults and 4 children)…

in 2013, the average earning power is enough to feed 5 persons

Which path shall we take…

Go back to the average of 2000-2008: AFL 36,000

Go back to the average of 2000-2013: AFL 34,000

Settle for average of 2009-2013: AFL 31,000

…what is Aruba’s collective aspiration for the following years?

Or

…what level of GDP can be achieved?

2013

2000

What does this mean

for every day life?

Average real GDP per capita

The 14-year average GDP per capita is about AFL 34,000 per year.

In 2013 Aruba is at a level of AFL 30,500 per year.

The fundamental questions

that arises are…

This is of course a policy matter and subject to various developments beyond the island’s control as well…

…

…but still…

That means that if the average earning power in the year 2000 was enough to feed

6

persons (2 adults and 4 children)…

in 2013, the average earning power is enough to feed

5

persons

Which path shall we take…

Go back to the average of 2000-2008: AFL 36,000

Go back to the average of 2000-2013: AFL 34,000

Settle for average of 2009-2013: AFL 31,000

Let’s place this question into perspective…

…..

…from a statistician’s point of view!

Assumptions:

Average annual inflation: 2.5%

Average population growth: 1.0%

One “Valero” unit

How much does the nominal GDP have to grow to maintain the same level of GDP per capita as in the year 2013?

How much does the nominal GDP have to grow to reach the level of GDP per capita during the period 2000-2008?

Assumptions:

Average annual inflation: 2.5%

Average population growth: 1.0%

How much does the nominal GDP have to grow to reach several levels of GDP per capita?

**at**

What does this mean in terms of real GDP growth?

The sales of different goods show some interesting trends in volume and price

What does this mean in terms of real GDP growth?

Water distribution to households in m3

Water supply in Afl (based on an average per household)

Electricity usage households in kWh

Price of electricity in Afl (based on a monthly average 725.5 KWH per household)

Real GDP per capita decreased with 17% since 2007, affecting our purchasing power

If order to reach pre-crisis real GDP level in 2018, average real GDP-growth need to be almost 5%

Aiming to reach this level in 2023 implies a growth of 3%

Tourism

Valero

Income:

(export)

Expenditure:

(import)

1) Future risks: Higher oil prices and high dependency on tourism

2) Headwinds: AOV, AZV, PPP

government bill

3) Lower labor productivity

4) Access to credit for domestic enterprises