Central Bank of Aruba Shows Continued Economic Weakness for 2006 Third Qtr, Especially in Tourism

The grim news continues to come from the Central Bank of Aruba. Much like an Aruban version of “ground hog day,” six more weeks of continued economic weakness. The weakness in the third quarter of 2006 continues to be profoundly from tourism. No matter what attempt Aruba tries to falsely market tourism in Aruba, it has failed and continues to do so. When will Aruba and its officials comprehend that the decline will continue as long as they keep denying the obvious? Tourists are staying away because they do not want cute TV ads of white sand beaches or radio ads discussing low rates; people want “Justice for Natalee”!

The slowdown in business activities is mostly affected by an ongoing sub-par performance in the tourism sector, as shown by the number of stay-over visitors and nights spent on the island, which declined by 4 percent and 2 percent, respectively, in the period under review. This decline was, however, not as pronounced as in the previous four quarters. Consequently, gross tourism receipts decreased by 3 percent, while the hotel occupancy rate registered a 5 percentage points fall-off to 74.6 percent.

Additional information reinforces above-mentioned weakening in economic activities. Growth in commercial bank credit was quite subdued compared to the third quarter of 2005. Furthermore, consumption of both water (measured in m3) and electricity (measured in KWH) declined by 3 percent and 1 percent, respectively. Gas consumption, however, did increase somewhat, i.e., by 2 percent. Nonetheless, merchandise import payments by the rest of the economy (excluding the oil and freezone sectors) went up by Afl. 15 million or 5 percent. (CBA complete analysis of Aruba)