Aruban Economy Set For Stronger Growth in 2023

• Fitch predicts that Aruba’s real GDP will rise by 2.0% in 2023 (down from an estimated 6.2% growth in 2022) and by 1.2% in 2024 due to strengthening private spending, investment and government consumption. The Aruban economy will grow at a weaker pace than the Caribbean average of 3.2% through 2032.
• Private consumption will grow by 4.0% in 2023, from a 0.5% expansion in 2022, investments will expand by 3.0% (2022: 5.9%), while government consumption will advance by 1.9% in 2023 (2022: 0.8%).
• Additionally, although the government has run a relatively balanced budget in recent years, projected economic growth and higher revenue generation will narrow the fiscal deficit to 0.1% of GDP in 2023, from a deficit of 1.6% of GDP in 2022, and to a surplus of 0.4% of GDP in 2024.
• Revenues are expected to increase by 10.4% in 2023, after 28.8% growth in 2022, as the government implements more prudent fiscal policy measures to cut spending and boost revenues. Meanwhile, expenditures are anticipated to rise by 3.3% in 2023, after a 3.0% decline in 2022. As a result, it is expected that total government debt to GDP will fall to 79.5% of GDP in 2023, from 81.4% of GDP in 2022.
• It is anticipated that net exports will support the Aruban economy's 1.7% average expansion in the 10 years ahead. Net exports will contribute an average of 0.7 percentage points to real GDP from 2023 to 2032. Private consumption and government consumption expansion over the same period will also support overall economic activity.

(Source: Fitch Solutions)