Economic growth in Aruba will tick upwards during the next 10-yearsdue to a steady increase in tourism arrivals growth and as the reopeningof Aruba's refinery bolsters fixed investment and exports. Thatsaid, the reopening of the refinery will not boost economic growthto the extent that the Aruban authorities expect given the financialdifficulties experienced by Petroleos de Venezuela.
Inflation will tick upwards over our 10-year forecast period drivenprimarily by a gradual recovery in domestic demand. Nevertheless,with the Centrale Bank van Aruba set to maintain its currency pegto the US dollar, anchoring imported inflationary pressures, headlineprice growth will remain relatively subdued.
Aruba's fiscal deficit will narrow over the next 10 years as the governmentimplements measures to cut spending and boost revenues.More prudent fiscal policy will drive a narrowing of the fiscal deficitand a moderation in the government's debt load.
Aruba's current account balance will remain largely in surplus overthe next 10 years driven primarily by robust tourism receipts andrefined oil exports. The country's stronger current account balance,compared to the previous five years, will ensure that Aruba's externaldebt remains sustainable over the next decade.
Aruba's political environment will remain stable over the next decadedriven primarily by policy continuity and rising economic growth. Inaddition, strong ties to the Netherlands will ensure continued improvementin the quality of Aruban institutions over the years ahead.