CAft advises Aruba to align tourism strategy with budget priorities

The College of Financial Supervision of Aruba (CAft) has advised the Aruban government to establish a clear strategic direction for the tourism sector and integrate this choice into national budgets, multi-year investment plans, and tax regulations.

While Aruba’s economy remains positive, growth is moderating following a strong post-pandemic recovery. CAft noted that collective-sector debt is projected to reach 64 percent of gross domestic product in 2025. The supervisor suggested that the current fiscal position provides a window of opportunity to implement reforms and invest before economic pressures intensify.

CAft highlighted several capacity constraints resulting from tourism growth, including labor shortages, increased pressure on water and electricity services, traffic congestion, and housing market strain. The report suggests a shift in focus from merely increasing visitor volume to maximizing value per visitor and pursuing economic diversification. Additionally, the supervisor warned against the fragmentation of government spending through the creation of too many earmarked funds and supported ongoing discussions regarding a potential transition from BBO to a value-added tax (VAT).