ARUBA MAY Contents. Page. money. No. 282

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1 CENTRALE C BANK B VAN ARUBA MONTHLY BULLETIN MAY Contents I. Main economicc indicators Page 1 Statistical Annex 1. Monetary survey 2. Components of broad money 3. Causes of changes in broad money 4. Foreign assets 5. Consolidated balance sheet of the money creatingg institutions 6. Centrale Bank van Aruba: Summary account 7. Commercial banks' consolidated summary account 8. Government revenue 9. Government s position with the monetary system 10. Tourism 11. Growth in stay over tourism 12. Consumer price index Published July 22, 2011 No. 282

2 I. Main economic indicators Monetary developments In May 2011, the money supply contracted by Afl million to Afl. 3,216.6 million after recording increases in the previous threee months. The fall stemmed from a decrease in the net domestic assets ( Afl. 3.4 million) and a net outflow of funds ( Afl million). As a result of the latter, the net foreign assetss (excluding revaluation differences of gold and foreign exchange holdings) went down to Afl. 1, million (Chart 1). This is Afl million ( 12.9 percent) less than the amount recorded in May Afl. 1,103.1 million or 82.9 percent of thesee reserves were held by the Centrale Bank van Aruba (CBA). 1,800 1,500 1, Chart 1: Net foreign assets (in Afl. million) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May CBA Commercial banks Total The smalll decrease of Afl. 3.4 million in the net domestic assets was primarily associated with an Afl million rise in government deposits. Claims on the private sector mitigated the decline in money supply by Afl million, as credit to enterprises and housing mortgages grew by Afl million (1.1 percent) and Afl. 2.7 million (0.3 percent), respectively. Consumer credit, however, fell by Afl. 3.1 million (0.6 percent). Tourism During the first half of 2011, total stay over visitors went up by 5.9 percent (24,105 more visitors) when compared to the same period of last year. This result was particularly thanks to significant increases of tourism from Venezuela and Colombia, which grew by 38.5 percent and percent, respectively, from January to June (13,647 more visitors). On the other hand, U.S. arrivals fell by 1.1 percent during the same period. In May 2011, the tourist sector performed moderately. The number of tourist arrivals went up by 1.5 percent when compared to May 2010 (Chart 2). In June, however, visitor arrivals grew markedly,, i.e., by 13.1 percent. The increase in June was driven by a strong performance from the South and Central American region ( percent) and a solid growth from the U.S. market (+4.5 percent). Chart 2: Stay over visitors (in thousand) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Contrary to stay over visitors, the number of cruise passengers declined by 9.1 percent in Mayy 2011, despitee the arrival of 2 more ships to 1

3 Aruba (Chart 3). However, the year to date number (January to May) shows a notable 11.9 percent rise in cruise passenger arrivals. 1 Chart 4: Inflation (end of period, in percent) Chart 3: Cruise visitors (in thousand) Jan Feb MarAprMayJun Jul AugSepOctNov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Inflation The consumer price index i (CPI) for May registered a 4.4 percent increase compared to the same month of 2010 (Chart 4). May is the fifth consecutive month in which the inflationn had accelerated. The components thatt contributed mostly to this growth weree gasoline and diesel ( percentage points), and electricity, gas and other fuels (+0.9 percentage point). The CPI excluding the food and energy components recordedd an increasee of 1.4 percent. The 12 month average inflation rate, an indicator of the trend inflation, remained at 0.8 percent in May 2011 (Chart 5). When excluding the energy and food components from the CPI a deflation of 0.4 percentage point was registered. Chart 5: Inflation (12 month average, in percent) Jan Feb Mar AprMayJun Jul AugSepOctNov Dec Government revenue Tax revenue developments continue to indicate a sustained economic recovery. In Mayy 2011, government tax revenue went up by Afl million (+26.8 percent) to Afl million, when compared to May 2010 (Table A). Revenue from income and profit 2

4 taxes rose by Afl million, while commodity taxes also noted a strong growth, expanding by Afl. 8.9 million. However, the latter is in part explained by an Afl. 5.0 million increase in excise taxes on gasoline related to collection arrears. Import duties grew by Afl. 2.8 million to Afl million, continuing its upward moving trend, while turnover tax revenue rose by Afl. 1.1 million (+19.3 percent). On the other hand, the Afl. 2.6 million decline in receipts in taxes on services partially mitigated this outcome, mainly associated with the introduction of the tourist levy 1. Proceeds from the tourist levy amounted to Afl. 5.1 million in May 2011, which is Afl. 2.1 million more than the income received from the hotel room tax in May 2010, primarily the result of the hike in rates in the second half of Furthermore, income from taxes on property recorded a decline of Afl. 1.5 million, compared to May Table A: Government tax revenue in May (in Afl. million) Change Tax revenue Taxes on income and profit Wage tax Income tax Profit tax Solidarity tax Taxes on commodities Excises on gasoline Excises on tobacco Excises on beer Excises on liquor Import duties Taxes on property Motor vehicle fees Succession tax Land tax Transfer tax Taxes on services Gambling licenses Hotel room tax Stamp duties Other Turnover tax (B.B.O.) Foreign exchange tax Source: Tax Collector s Office/CBA. 1 The tourist levy replaced the hotel room tax as of January 1, The tourist levy proceeds goes directly to the Aruba Tourism Authority and, thus, do not form part of the tax income 3

5 TABLE 1: MONETARY SURVEY* End of period 2010 March April May 2011 March April I. Net domestic assets 1, , , , , , , , ,889.6 A) Domestic credit 2, , , , , , , , , ) Net claims on public sector a) Gross claims** b) Government's deposits c) Development funds ) Claims on private sector a) Enterprises b) Individuals 1) Consumer credit 2) Housing mortgages c) Other 2, , , , , , , , , , , , , , , , , , , , , , , , , , , B) Other items, net II. Net foreign assets , , , , , , , ,343.3 A) Centrale Bank van Aruba*** B) Commercial banks , , , , , , , , III. Broad money 2, , , , , , , , ,232.9 A) Money B) Quasi-money 1, , , , , , , , , , , , , , , , , ,691.7 * T he mon etary survey conso lidates th e accoun ts of the Centrale Bank van Aruba, the commercial banks an d th e Gov ernment related on ly to the issuance of components of the money supply, i.e., coin s and treasury bills. This survey sho ws the financial relation ship between the monetary sector, whose liabilities include the money supply, and oth er sectors of the econ omy. ** Gross claims include loans granted as well as government bond s in the han ds of the mon etary sectors and claims resulting from the issuance of treasury bills, cash certificates, and coins. *** Revaluation differen ces of gold an d official foreign exchange holdings are excluded in order to approximate the net import of foreign fu nds by the n onmonetary sectors. May 1, , , , , , , , , ,

6 TABLE 2: COMPONENTS OF BROAD MONEY End of period Currency Issued At banks Outside banks Demand deposits Afl. Foreign currency Total Money Other deposits Treasurmoney Quasi- Savings Time Total bills Afl. Foreign currency Afl. Foreign currency (3= (6= (7= (12= (14= (1) (2) 1-2) (4) (5) 4+5) 3+6) (8) (9) (10) (11) ) (13) 12+13) Broad money (15= 7+14) , , , , , , , , , , , , , , , , , , , , , , January , , , , , ,217.4 February , , , , , ,257.0 March , , , , , ,242.9 April , , , , , ,268.0 May , , , , , ,294.6 June , , , , , ,239.0 July , , , , , ,221.7 August , , , , , ,237.5 September , , , , , ,241.7 October , , , , , ,268.3 November , , , , , ,301.7 December , , , , , , January , , , , , ,151.0 February , , , , , ,163.8 March , , , , , ,174.1 April , , , , , ,232.9 May , , , , , ,

7 TABLE 3: CAUSES OF CHANGES IN BROAD MONEY During period 2010 March April May 2011 March April May I. Net domestic money creation A) Domestic credit ) Net claims on public sector a) Recourse to monetary system b) Drawing down of bank balances 1) Government's deposits 2) Development funds ) Claims on private sector a) Enterprises b) Individuals 1) Consumer credit 2) Housing mortgages c) Other B) Other domestic factors II. Inflow of foreign funds* III. Broad money ) Money 2) Quasi-money * Revaluation differen ces o f gold and official foreign exchan ge holdings are exclu ded in order to approximate the net import of foreig n fund s b y the nonmonetary sectors. 6

8 TABLE 4: FOREIGN ASSETS Centrale Bank van Aruba Gold Other assets tion diffe- excl.( 9) Net rences* Liabilities Net Assets Liabilities Commercial banks Total Revalua- Total End of period (4= (7= (8= (10= (1) (2) (3) 1+2-3) (5) (6) 5-6) 4+7) (9) 8-9) , , , , , , , , , , , , January , , , ,478.4 February , , , ,514.7 March , , , ,520.3 April , , , ,541.9 May , , , ,527.1 June , , , ,552.1 July , , , ,511.2 August , , , ,501.9 September , , , ,428.0 October , , , ,407.6 November , , , ,411.9 December , , , , January , , ,316.7 February , , ,332.7 March , , ,330.8 April , , ,343.3 May , , ,330.5 * Of go ld an d official foreig n exchange h oldings, in accordan ce with the Central Bank O rd inance as revised in December

9 TABLE 5a: CONSOLIDATED BALANCE SHEET OF THE MONEY-CREATING INSTITUTIONS End of period 2010 March ASSETS 1. Claims on money-creating institutions a) Monetary authorities b) Commercial banks Claims on the public sector a) Short-term b) Long-term Claims on the private sector a) Enterprises b) Individuals 1) Consumer credit 2) Housing mortgages c) Capital market investments d) Other 2, , , , , , , , , , , , , , , Foreign assets a) Gold b) Short-term c) Long-term 1, , , , , , , , Other domestic assets Total assets 4, , , , ,696.7 April , , , , , ,764.4 May , , , , , , March , , , , ,565.5 April , , , , , ,648.4 May , , , , , ,

10 TABLE 5b: CONSOLIDATED BALANCE SHEET OF THE MONEY-CREATING INSTITUTIONS (continued) End of period 2010 March April May LIABILITIES 7. Broad money a) Money b) Quasi-money 2, , , , , , , , , , , , , , , , , , , , , Money-creating institutions a) Monetary authorities b) Commercial banks Public sector deposits a) Government b) Development funds Long-term liabilities a) Government b) Private sector 11. Subordinated debt Capital and reserves Foreign liabilities a) Short-term b) Long-term Revaluation differences* Other domestic liabilities Total liabilities 4, , , , , , ,754.5 * Of gold an d official fo reign exchange holdings March 3, , , ,565.5 April 3, , , ,648.4 May 3, , , ,

11 TABLE 6: CENTRALE BANK VAN ARUBA: SUMMARY ACCOUNT Domestic assets Foreign assets Total assets = Total liabilities Domestic liabilities Capital and reserves Government Develop- ment funds Reserve money Demand Time Total Other reserve money End of period (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) Notes deposits deposits Revaluation of gold and foreign exchange holdings Foreign liabilities (13) , , , , , , January , , February , , March , , April , , May , , , June , , July , , August , , , September ,37 1, , October , , November , , December , , January , , February 2 1, , March , , April , , May , ,

12 TABLE 7: COMMERCIAL BANKS' CONSOLIDATED SUMMARY ACCOUNT End of period April 2011 Overall Resident Non- Resident May 2011 Overall Resident Non- Resident Assets 1) Cash ) Central Bank a) Current account b) Time deposits ) Due from banks a) Current account b) Time deposits ) One year and below ) Over one year ) Loans 2, , , , a) Enterprises b) Individuals c) Mortgage 1, , , , d) Government 5) Securities a) Short-term securities b) Government bonds c) Other ) Sundry ) Fixed assets ) Total 4, , , , Liabilities 9) Current account 1, , , , a) Government b) Private sector 1, , , , ) Savings deposits ) Time deposits 1, , a) Development funds b) Private sector ) Due to banks ) Other liabilities ) Capital and reserves ) Total 4, , , , Supervisory ratios* Capital/risk-weighted assets ratio Loan/deposit ratio Liquidity ratio * Supervisory ratios cannot be derived from the consolidated balance sheet. 11

13 TABLE 8: GOVERNMENT REVENUE March April May March April May TOTAL REVENUE 1, , , , TAX REVENUE , Taxes on income and profit Wage tax Income tax Profit tax Solidarity tax Taxes on commodities Excises on gasoline Excises on tobacco Excises on beer Excises on liquor Import duties Taxes on property Motor vehicle fees Succession tax Land tax Transfer tax Taxes on services Gambling licenses Hotel room tax Stamp duties Other Turnover tax (B.B.O.) Foreign exchange tax NONTAX REVENUE Grants Other nontax revenue * * Including debt forgiveness. Source: Tax Collector's Office/Centrale Bank van Aruba 12

14 TABLE 9: GOVERNMENT'S POSITION WITH THE MONETARY SYSTEM Domestic deposits Gross Liabilities to Net Central Commercial liquidity Monetary Commercial Total liability Bank banks position authorities banks to the monetary Free Earmarked Development Total Demand Development system funds funds End of (4= (7= (10= (11= period (1) (2) (3) 1+2+3) (5) (6) 4+5+6) (8) (9) 8+9) 10-7) Change in net liability during period (12) January February March April May June July August September October November December January February March April May

15 TABLE 10: TOURISM Total Total Visitors by origin Average Average Cruise tourism visitor visitors nights hotel nights North Of which Latin Of which Europe Of which Other stay occupancy Number of Ship America U.S.A. America Venezuela Nether- rate passengers calls lands period (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) ,879, , , , ,681 92,157 67,353 37,844 29, , ,264, , , , , ,034 73,144 41,439 31, , ,172, , , , , ,063 75,000 41,211 26, , ,466, , , , ,443 90,949 76,362 40,487 29, n.a. 569, January 620,638 71,396 53,312 47,596 10,290 5,301 6,156 3,227 1, , February 544,098 67,710 52,833 48,326 7,727 4,135 5,504 3,290 1, , March 567,635 77,258 58,856 54,418 10,568 7,022 5,835 3,238 1, , April 492,079 69,192 53,917 51,210 8,474 5,042 4,371 2,949 2, , May 484,401 64,383 47,635 44,945 7,489 3,976 6,920 3,639 2, , June 452,902 60,243 43,649 41,734 9,023 4,910 5,517 2,495 2, ,474 7 July 616,204 75,369 50,305 47,499 12,807 6,305 8,200 4,175 4, ,814 2 August 577,811 73,230 44,386 41,997 19,161 14,175 7,326 3,465 2, ,827 2 September 440,338 58,460 33,655 32,490 15,826 10,918 6,666 3,070 2, n.a. 7,478 3 October 526,013 67,034 43,681 42,084 12,900 7,407 7,466 3,800 2, n.a. 40, November 484,450 63,388 43,741 40,994 11,232 6,688 5,986 3,552 2, n.a. 88, December 659,648 77,788 47,632 42,607 20,946 15,070 6,415 3,587 2, n.a. 82, January n.a. 74,965 53,818 48,060 12,783 6,750 6,674 3,337 1,690 n.a. n.a. 97, February n.a. 68,905 52,655 46,805 8,368 4,549 6,387 3,482 1,495 n.a. n.a. 90, March n.a. 77,184 57,449 50,903 11,051 6,367 5,713 3,293 2,971 n.a. n.a. 110, April n.a. 79,717 54,895 51,915 16,653 11,998 5,882 3,475 2,287 n.a. n.a. 55, May n.a. 65,380 46,561 43,906 10,088 5,160 6,474 3,042 2,257 n.a. n.a. 15, Source: Aruba Tourism Authority/Central Bureau of Statistics/Aruba Hotel and Tourism Association/Cruise Tourism Authority. 14

16 TABLE 11: GROWTH IN STAY-OVER TOURISM Total Total North Of which Latin Of which Europe Of which Other visitor visitors America U.S.A. America Venezuela Nethernights lands period (1) (2) (3) (4) (5) (6) (7) (8) (9) Monthly precentage changes 1) 2010 January February March April May June July August September October November December January n.a February n.a March n.a April n.a May n.a Cumulative percentage changes 2) 2010 January February March April May June July August September October November December January n.a February n.a March n.a April n.a May n.a ) As compared to a year earlier. 2) From the beginning of the year to the end of the indicated period as compared to the corresponding period of 15

17 TABLE 12: CONSUMER PRICE INDEX (December 2006 = 100) Percentage Change All Over Over Over Last 12 months groups previous 3 months a year over previous End of period index month earlier earlier 12 months January February March April May June July August September October November December January February March April May * As of January 2009, the basis September 2000 = 100 has been shifted to December 2006 =