Economic Outlook April 2016 Centrale Bank van Aruba

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The latest forecasting round (January 2016) for the Aruban economy is based on newly available information, statistical data, and policy changes by the government. Meetings with several key stakeholders indicate that several large projects have suffered delays, are on hold, or have been discontinued. For instance, the Bahia Principe Hotel project (total investment in the first phase of approximately Afl. 143 million), which was planned to begin in June 2015, is currently on hold. Similarly, the Windpark project (total investment of roughly Afl. 165 million) has been shelved until further notice, whereas the Hard Rock Hotel project (total investment of circa Afl. 190 million) has been cancelled.

These investment projects are substantial, and despite applying correction factors in the forecast exercise to account for possible delays in the realization of investments, the status change of these projects had important implications on the new estimations for 2015. In the case of nominal investments for 2015, the forecasted figure of January 2015 was adjusted downwards by 6.8 percentage points to a 1.5 percent decrease in the January 2016 estimate (Table 1a). Similarly, the forecasted real investments for 2015 were revised downwards by 6.6 percentage points to -2.1 percent (see Table 1b). Consequently, nominal 2015 GDP estimates were likewise revised downwards to 2.0 percent growth (see Table 1a).

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