ORANJESTAD – Aruba is projecting a substantial budget surplus for 2027 and remains on track to reduce its public debt, but the country is investing far too little considering the major infrastructure and development challenges it faces. That is one of the main conclusions of the Aruba Financial Supervision Board (CAft) in its assessment of the draft 2027 budget.
Aruba projects a surplus of AWG 203 million for the collective sector in 2027, equivalent to 2.3 percent of gross domestic product. Between 2028 and 2031, annual surpluses of at least 1.5 percent of GDP are projected. According to the CAft, the draft budget therefore currently complies with the fiscal balance requirements under Aruba's financial supervision legislation.
The CAft nevertheless expressed concern about the country's investment levels. Outside the new General Investment and Development Fund (AIOF), Aruba has budgeted only AWG 3.5 million for investments in 2027, an amount the supervisory board describes as “marginal” given the significant investment needs facing the country.
Aruba intends to place most future investments through the AIOF and has allocated AWG 11 million to the fund for 2027. However, the fund is not yet operational, and the government has not submitted its budget or a multi-year investment agenda to the CAft. As a result, it remains unclear when the money will be spent and which projects will receive funding.
The CAft is urging Finance Minister Geoffrey Wever to submit the AIOF budget before the 2027 budget is presented to Parliament. It also wants a multi-year investment plan linked to Aruba's policy priorities and its capacity to actually execute projects.
At the same time, Aruba's debt outlook is improving. The collective sector's debt is projected at approximately AWG 4.568 billion at the end of 2027, equivalent to about 53 percent of GDP according to the CAft's calculation. Based on projected economic growth and annual debt repayments, that ratio could decline to 39 percent by 2031.
Despite that improvement, interest payments continue to consume a significant portion of government resources. The CAft estimates that in 2027 approximately 15 cents of every florin collected by the government will be spent on interest obligations. It notes that Aruba has not yet incorporated potential refinancing possibilities under the Sustainable Public Finances Aruba Kingdom Act, which could create additional budgetary room.
Government revenue is projected at AWG 2.005 billion in 2027, an increase of AWG 55 million compared with 2026. Expenditure is expected to reach AWG 1.916 billion, up AWG 82 million. Personnel expenses alone are projected to rise by AWG 16 million to AWG 532 million, while spending on goods and services increases by AWG 56 million.
The financial watchdog also identified another uncertainty. Aruba's official collective sector was expanded in June from six to 34 entities, but that broader definition has not yet been fully incorporated into the draft budget. The CAft says this makes it unclear what effect the additional government-related entities could have on Aruba's fiscal balance and compliance with financial standards.
Another longer-term concern involves healthcare and social security. Although both AZV and SVb are expected to generate substantial surpluses in the coming years, those surpluses are projected to decline as Aruba's population ages. The CAft warns that measures will be needed in time to keep healthcare and social security spending financially sustainable.
The government plans to use surpluses from AZV and SVb for debt reduction, a development welcomed by the CAft because it could also help reduce interest expenses.
While the CAft's assessment therefore presents a relatively positive picture of Aruba's budget balance and declining debt burden, its message on investment is clear: stronger public finances alone will not be enough if the government does not translate that fiscal space into carefully planned investments in infrastructure and other areas that strengthen Aruba's long-term economic capacity.