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Economy

Aruba enjoys one of the highest standards of living in the Caribbean region including a low unemployment rate. About three quarters of the Aruban gross national product is earned through tourism or related activities. Most tourists are from Venezuela and the United States predominantly from eastern and southern states. Before the "Status Aparte" a separate completely autonomous country/state within the Kingdom, oil processing was the dominant industry in Aruba despite expansion of the tourism sector. Today, the influence of the oil processing business is minimal. The size of the agriculture and manufacturing sectors also remains minimal.

The GDP per capita for Aruba was estimated to be $21,800 in 2004; among the highest in the Caribbean and the Americas. Its main trading partners are Venezuela, the United States and the Netherlands.

Deficit spending has been a staple in Aruba's history, and modestly high inflation has been present as well. As of 2006, the government's debt had grown to 1.883 billion Aruban florins. Aruba received some development aid from the Dutch government each year through 2009, as part of a deal signed as "Aruba's Financial Independence" in which the Netherlands gradually reduced its financial help to the island each successive year. The exchange rate of the Aruban florin has remained steady in recent years at 1.79 florins to 1 U.S. dollar.

In 2006 the Aruban government has also changed several tax laws to further reduce the deficit. Direct taxes have been converted to indirect taxes as proposed by the IMF. A 3% tax has been introduced on sales and services, while income taxes have been lowered and revenue taxes for business reduced by 20%. The government compensated workers with 3.1% for the effect that the B.B.O. would have on the inflation for 2007. The inflation on Aruba in 2007 was 8.7%.

 


Courtesy of Wikipedia