Reserves expand despite declining tourist arrivals for three Caribbean territories
Tuesday, April 11 2017 @ 02:15 PM AST
Contributed by: elijose
From the RBC Caribbean Economic Report April 2017:
Aruba — Reserves expand despite declining stopovers
Caribbean Tourism Organization (CTO) data show stopover arrivals fell 10% in 2016, as 4.8% fewer Canadians, and according to the Central Bank (CBA), 40.4% fewer Venezuelans, visited Aruba. Cruise passenger arrivals grew 8.1% in 2016, CTO data show. The CBA reported that deflation deepened to 0.4% y/y in January 2017 based mainly on lower electricity prices, although the hospitality sector registered price increases, despite a 14.2% y/y decline in stopover arrivals in January, as 68.2% fewer Venezuelans visited. Cruise pas-
senger arrivals fell 11.6% y/y in January 2017, according to the CBA. CBA official reserves expanded 8.26% y/y to USD874.33 million in January 2017, which we estimate at 4.9 months of imports.
The Bahamas — Reserves up 10.5% y/y in January 2017 Central Bank (BCB) Q4 2016 report has quantified the impact of hurricane Matthew on certain sectors. Construction activity and related employment strengthened since October 2016, but otherwise, deterioration was recorded.
The fiscal deficit widened in Q2 FY2016/17 by 168.6% y/y to BSD228.3 million, BSD130 million of which was financed via a special syndicated hurricane relief loan. Airport passenger traffic fell 3.4% y/y in Q4 2016. External reserves expanded 10.5% y/y in January 2017 to USD930.54 million, which we estimate at 2.3 months of imports.
Curacao and Sint Maarten — Policy rates being hiked
The Central Bank has increased its policy rate to 1.50%, up from 1% where it had held since December 2008, based partly on rising rates in the USA. Reserves expanded by 2.1% y/y in February to NAf2.184 billion, which we estimate at over six months of imports for the currency union overall. CTO data show that stopover arrivals to Curacao declined by 5.8% in 2016, based on fewer visitors from all major source markets apart from Europe. Cruise pas-
senger arrivals declined 11.3% in Curacao and 12.2% in St. Maarten in 2016.