Caribbean Market Overview - Q1 2021 - CIBC FirstCaribbean
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Caribbean Market Overview
Q1 2021
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Caribbean Market Overview – Q1 2021 Table of Contents Market Review ........................................................................................................................... 2 Caribbean Economic Review .................................................................................................. 11 Antigua and Barbuda............................................................................................................... 13 Aruba ....................................................................................................................................... 15 The Bahamas .......................................................................................................................... 17 Barbados ................................................................................................................................. 19 Belize ....................................................................................................................................... 21 Bermuda .................................................................................................................................. 23 Cayman Islands....................................................................................................................... 25 Costa Rica ............................................................................................................................... 28 Curaçao ................................................................................................................................... 30 Dominica ................................................................................................................................. 32 Dominican Republic ................................................................................................................ 34 El Salvador .............................................................................................................................. 36 Grenada .................................................................................................................................. 38 Guyana .................................................................................................................................... 40 Jamaica ................................................................................................................................... 42 Panama ................................................................................................................................... 45 St. Kitts and Nevis ................................................................................................................... 47 St. Lucia .................................................................................................................................. 49 Sint Maarten ............................................................................................................................ 51 St. Vincent and the Grenadines .............................................................................................. 53 Suriname ................................................................................................................................. 55 Trinidad and Tobago ............................................................................................................... 57 Turks and Caicos .................................................................................................................... 60 About CIBC ............................................................................................................................. 62 About CIBC FirstCaribbean ..................................................................................................... 64 Notes ....................................................................................................................................... 65 CIBC Capital Markets & CIBC FirstCaribbean International Bank April 2021
Caribbean Market Overview – Q1 2021 1 Caribbean Market Review CIBC Capital Markets & CIBC FirstCaribbean International Bank April 2021
Caribbean Market Overview – Q1 2021 2
Market Review Luis Hurtado
CIBC Capital Markets
Summary
Following increased uncertainty stemming from the pandemic and the surge in volatility across asset classes, emerging
market credits experienced a quick rebound into the latter part of 2020, on the back of positive vaccine news, a slight
recovery of economic activity and the dissipation of political risks related to the US elections. This environment opened a
brief opportunity window, allowing many countries to satisfy their financing needs for 2020 and pre-emptively obtain
funding for 2021. Unfortunately for emerging market credits, this positive backdrop did not last for too long. The return of
the reflation theme has dominated market headlines as US yields have resumed their upward path, with a clear
acceleration of this trend since mid-February. As expected during such episodes, curves across the space shifted higher
and steepened as the market reassessed the rate increases in advanced economies. Since then, the Fed and other
advanced economies’ central banks have maintained dovish stances. Moreover, the “dots” in the latest Fed rate
announcement suggest that rates could remain on hold throughout 2021-2022. Nevertheless, with financing costs on the
rise, we expect investors to start paying more attention to intrinsic issues as countries decide whether to support growth or
implement fiscal adjustment measures to prevent further credit rating downgrades in the short term.
Caribbean and Central American (CAC) economies benefited from a better issuance environment in late 2020 and 2021,
with the likes of Dominican Republic, Panama, and Bahamas completing their financing needs for 2020, funding a
significant proportion of their 2021 financing needs, and even undertaking some liability management. Having said that,
and as we mentioned in our previous publication, the disconnect between the deterioration of the fundamental picture and
the performance of regional credits has been more than evident. It is partly explained by the sharp drop in global rates
and the search for yield across asset classes. Nevertheless, as rates start to normalize, we expect to see a ramp-up in the
scrutiny of credits in the region – a situation already in play.
Looking at the performance of CAC credits since our last publication, COSTAR and ELSALV gained the most ground, with
average yield declines of 75bps and 149bps, respectively, across their curves. Costa Rica’s IMF agreement and
advanced discussions for an extended fund facility in El Salvador were the main reasons behind these rebounds, allowing
each country to significantly reduce its financing costs while providing a much-needed source of funding for 2021.
However, such positive performance has stalled, in line with the recent increase in US yields. In the case of Costa Rica,
we do not expect much of an improvement from current levels as Congress’ approval of the IMF deal and a rapid
implementation of the reforms remain short-term risks. On the other hand, El Salvador should receive a final boost on its
potential agreement with the IMF and rapid approval as governability improves with the official party obtaining more than
two-thirds of the seats in Congress.
PANAMA and JAMAN were the regional underperformers, with average yields across their curves moving +56bps and
+24bps, respectively. The lack of an immediate fiscal adjustment plan in Panama and the 18% decline in GDP growth
prompted a round of downgrades by Fitch, Moody’s and S&P in early 2021, increasing investors’ concerns of further credit
rating action that could cost the credit its investment grade in the coming years. Looking at JAMAN, the credit’s
underperformance could be attributed to the lack of an effective response to the health crisis, resulting in low growth and
greater fiscal concerns.
• Bahamas: The IMF’s latest estimates suggest a 16.2% contraction of real economic activity in 2020, and a very
modest 2% recovery 2021 as tourist arrivals will likely remained depressed 2021 and could take a couple years to
rebound fully. Globally imposed travel restrictions generated a collapse of tourism activity in 2020. Air arrivals to
the Bahamas shrank 72.5% y/y reflecting declines of 75.3% y/y, 77.4% y/y and 72.5% y/y to New Providence,
Grand Bahama and the Family Islands, respectively. On the fiscal front, the Government of Bahamas’ fiscal deficit
deteriorated US$542.mln to US$736.1mln during the first half of FY2020/21, ended December 2020. The
Government’s direct external debt outstanding climbed US$1.13bln to US$4.03bln over the six-month period,
accounting for 42.8% of total direct debt, while domestic debt rose US$96.7mln to US$5.39mln. Consequently,
national debt stood at US$9.86bln at the end of December 2020, representing 87.7% of 2020 estimated GDP.
CIBC Capital Markets & CIBC FirstCaribbean International Bank April 2021
Caribbean Market Overview – Q1 2021 3
• Barbados: Despite a partial recovery over the second half of the year, the Central Bank of Barbados (CBB)
estimates that real economic activity contracted by 17.6% during 2020. Hotel occupancy improved particularly in
the fourth quarter of the year partly reflecting the use of hotels as Government-approved quarantine centres.
However, real tourism value-added remained 70.8% lower in 2020 relative to 2019, largely reflecting a 90% fall-off
in long-stay arrivals over the last three quarters of the year. The Barbadian Government registered a
US$121.5mln (2.8% of GDP) primary surplus over the first nine months of FY2020/21 ended December 2020.
Revenue shortfalls largely emanating from reduced consumer spending propelled this outturn, but greater
corporation taxes confined the deterioration of the overall fiscal balance to a US$17.9mln deficit. The lowering of
the primary surplus target to a 1% of GDP deficit increased Government’s funding requirements reversing the
positive movement in the debt stock. Gross public sector debt, including arrears, expanded by US$224.8mln
since March 2020 to US$6.41bln (144.2% of GDP) at the end of December 2020, after accounting for
amortization during the period. External policy loans totalling US$484mln supported the Government’s financing
requirements during the nine-month period.
• Bermuda: Following a 15.7% contraction in Q2, real economic activity contracted 5.9% during Q3 2020 largely
reflecting reduced private consumption induced by restrictions implemented on business activity. The Ministry of
Finance estimates that real GDP fell 8.5% in 2020. Latest tourism statistics suggest the impact of the pandemic
decimated tourism activity during 2020. Air arrivals to Bermuda plummeted 84.4% y/y during 2020, while the
number of cruise and yacht tourists were lower by 98.3% y/y and 59.4% y/y, respectively. The Bermudan
Government’s operations resulted in a US$135.8mln deficit during the first half of FY2020/21 ended September
2020, relative to the US$7.6mln deficit recorded one year earlier. Gross debt stood rose to US$2.98bln
(US$2.92bln net of the sinking fund) at the end of September 2020. To fund measures associated with the
pandemic, in May the Government raised its debt ceiling from US$2.75bln to US$2.9bln and secured a
US$150mln credit facility with local financial institutions. The Government raised the ceiling by a further
US$600mln to US$3.5bln in July in anticipation of its US$1.35bln bond issuance in August intended to fund its
deficits over the next few years and to conduct liability management of existing indebtedness.
• Costa Rica: The Central Bank of Costa Rica’s most recent quarterly numbers showed that Q4 2020 GDP growth
came in at -3.7% y/y, improving from the -8.5% y/y, and -7.0% y/y posted in Q2, and Q3, respectively, as some
mobility restrictions and social distancing measures were lifted. With these numbers 2020 GDP growth landed at -
4.5%. On the fiscal front, As expected, IMF headlines provided support for COSTAR, with initial optimism
allowing the Government to access better financing terms in the local market. Nevertheless, long and difficult
discussions are in store, as is a lengthy approval process in Congress. As expected, IMF headlines provided
support for COSTAR, with initial optimism allowing the Government to access better financing terms in the local
market. Nevertheless, long and difficult discussions are in store, as is a lengthy approval process in Congress.
• Dominican Republic: Preliminary numbers from the Banco Central de la Republica Dominicana (BCRD) showed
Q4 2020 growth coming in at 2.9% y/y, improving from the -16.9% y/y and -7.2% y/y posted in Q2 and Q3,
respectively. With these numbers, 2020 GDP growth landed at -6.7%, a significant drop from the 5.1% increase of
2019 as the country battled the negative repercussions arising from the COVID-19 pandemic. The data available
on the central bank website (although it has not been updated to reflect the fiscal numbers up to December) are
aligned with the Ministry of Finance’s announcement that the 2020 deficit landed at 7.7% of GDP, below the
initially estimated 9.3%. We will need to further analyze the data once it becomes available but it seems to
suggest poor fiscal budgeting and/or a sharp deceleration of capital expenditures during the last quarter of 2020.
Regarding this year’s financing needs, the Dominican Republic issued US$2.5bln in sovereign bonds in January,
likely ending its participation in external markets for 2021. Also, note that unused funding from last year should
reduce the financing needs in the local market this year, limiting pressures on local rates.
• El Salvador: Q4 2020 GDP growth declined 2.2% y/y, recovering from the -9.3% y/y posted a quarter earlier but
still below the +1.3% y/y recorded a year earlier. With this number, 2020 GDP growth landed at -7.9% y/y, in line
with the Banco Central de El Salvador estimate. Recent fiscal numbers continued to show a negative trend, with
January-February NFPS revenues (including donations) coming in at US$1.0bln, or -1.9% y/y. On the other hand,
total expenses increased 7.3% y/y during the same period. With these numbers, the 12-month deficit to February
2021 reached US$2.6bln or 10.6% of GDP, while the primary deficit came in at US$1.5bln or 6.0% of GDP. Total
CIBC Capital Markets & CIBC FirstCaribbean International Bank April 2021
Caribbean Market Overview – Q1 2021 4
public debt sits at 92.3% of GDP. The February election outcome favoured the steepening of the ELSALV curve
with the short-end outperformance continuing over the last month, providing much-needed relief to Government
finances. The move, as we’ve mentioned in previous comments, was supported by better governability prospects
ahead of a negotiation with the IMF. Although Congress’ support for an eventual agreement is practically
guaranteed given the body’s new composition, we remain wary of implementation risks into next year
• Jamaica: The negative impact of the COVID-19 shock on tourism and local business activity will likely continue to
weigh heavily on Jamaica’s real economic activity and fiscal performance in 2021, though the impact has been
more moderate than in several regional markets with higher tourism dependency. Following an expected 8.6%
contraction in 2020, the IMF predicts 3.6% partial recovery of the Jamaican economy in 2021. Output of the hotel
and restaurant sector contracted 53.7% y/y during January to September 2020. During Q3 specifically, the sector
shrank by 65.2% y/y as travel restrictions in major source markets and reintroduction of local curfews kept arrivals
suppressed despite the reopening of borders. The Government of Jamaica’s fiscal balance deteriorated by
US$668.3mln to a US$488.1mln deficit during the first nine months of FY2020/21 ended December 2020. Total
Central Government debt stood at US$14.20bln at December 2020, as domestic debt rose 1.9% since March
2020 to US$5.44bln but external debt rose marginally y/y to US$8.75bln. Meanwhile, the net debt of public bodies
fell US$148.3mln to US$332.2mln over the same period. On December 8 Standard and Poors’ affirmed Jamaica’s
sovereign credit rating at ‘B+’ maintaining a negative outlook.
• Panama: Q4 2020 GDP numbers maintained a marked negative trend, dropping 10.9% y/y, albeit improving from
the 18.8% y/y and 20.4% y/y declines in Q2 2020 and Q3 2020, respectively. With these numbers, 2020 growth
came in at -18% y/y, the largest contraction in Latin America. Non-Financial Public Sector (NFPS) revenues for
2020 landed at US$9.7bln, down 21.2% y/y. Total expenses dropped 5.7% y/y to US$15.1bln. Hence, the 2020
NFPS nominal deficit came in at 10.1% of GDP, up from 2.9% during in 2019, while the primary deficit reached
US$3.9bln, or 7.4% of GDP. Total NFPS debt reached US$37bln in February, or 70% of GDP. We maintain a
downward bias with respect to the growth forecast for this year. The spread of the pandemic in the country is still
to dictate how quickly internal demand will rebound. Moreover, the market no longer appears to give Panama the
benefit of the doubt, with Moody’s, S&P and Fitch all downgrading the country’s credit rating on the lack of a
credible fiscal consolidation path and the substantial contraction of growth in 2020.
• Suriname: The Centrale Bank van Suriname’s latest estimates suggest that real economic activity declined
13.4% during 2020. During January to September 2020, the external current account balance improved reflecting
the surge in gold prices and lower import demand. The Government of Suriname’s fiscal deficit worsened 46.6%
y/y to SRD4.5bln during January to September 2020 reflecting a fall-off in revenue and an even larger expansion
in expenditure. Funding from the Centrale Bank van Suriname dominated the Government’s financing during the
period. Total domestic debt rose 87.1% to SRD14.1bln, of which debt to the Centrale Bank soared 163.1% to
SRD9.57bln, while external debt increased 3.2% to US$2.05bln largely due to upticks in balances owed to
multilateral and bilateral creditors. Following the November 2020 agreement with bondholders to defer debt
service payments of the October 2026 and December 2023 bonds until, April 24 2021, Suriname’s liquidity
position likely remained constrained. However, with a more extensive debt restructuring on the cards, the deferral
period allows for productive discussions with creditors, while technical discussions with the IMF regarding the
Government’s request for financial support remained ongoing.
• Trinidad and Tobago: The Central Bank of Trinidad and Tobago’s quarterly index of real economic activity
suggests that following a 7.5% decline in H1 2020, real economic output declined by 8.7% during Q3 2020. Since
then, preliminary indicators suggest that both the energy and non-energy subsectors remained subdued during
the year. The Government registered a US$2.48bln (11.2% of GDP) deficit during FY2019/20 relative to its
US$593.9mln (2.6% of GDP) deficit in FY2018/29. This outturn largely reflected a sharp fall-off in both energy and
non-energy receipts that overshadowed a very modest decline in Government spending. Moreover, the
Government financed its FY2019/20 deficit from a combination of domestic and external sources, including
around US$900mln from the Heritage Stabilization Fund (HSF). However, the Government sourced an additional
US$204mln from the HSF during the quarter. In December 2020, central government debt stood at US$14.9bln
(68.4% of GDP). Meanwhile, gross public sector debt stood at US$19.7bln (90.6% of GDP), while net public debt
(excluding debt used for sterilisation) stood at US$18.0bln (82.7% of GDP).
CIBC Capital Markets & CIBC FirstCaribbean International Bank April 2021
Caribbean Market Overview – Q1 2021 5
Chart 1 Chart 2
High Yield - 10Y Against Benchmark Investment Grade - 10Y Against Benchmark
1370 bps DOMREP COSTAR JAMAN 700 bps
PANAMA BERMUD TRITOB
ELSALV BAHAMA
1170 600
500
970
400
770
300
570
200
370 100
170 0
Apr-19 Aug-19 Dec-19 Apr-20 Aug-20 Dec-20 Apr-21 Apr-19 Aug-19 Dec-19 Apr-20 Aug-20 Dec-20 Apr-21
Source: Bloomberg and CIBC Capital Markets – FICC Strategy
10Y bonds are: COSTAR 6 1/8 02/19/31 DOMREP 4 1/2 01/30/30 JAMAN 6 3/4 04/28/28 BAHAMA 6.95 11/20/29 BERMUD 4 3/4 02/15/29
TRITOB 4 1/2 08/04/26 PANAMA 3.16 01/23/30 SURINM 9 ¼ 10/26/26 ELSALV 8 5/8 02/28/29
Chart 3
Caribbean and Central American Bonds Change in Yields Since Last Publication (December 14, 2020)
PANAMA 4 1/2 05/15/47
PANAMA 4.3 04/29/53
PANAMA 3.87 07/23/60
DOMREP 5 7/8 01/30/60
DOMREP 4 1/2 01/30/30
PANAMA 9 3/8 04/01/29
PANAMA 3.16 01/23/30
JAMAN 8 03/15/39
DOMREP 6.85 01/27/45
DOMREP 6.4 06/05/49
TRITOB 4 1/2 08/04/26
PANAMA 3 7/8 03/17/28
DOMREP 7.45 04/30/44
PANAMA 8 7/8 09/30/27
JAMAN 6 3/4 04/28/28
JAMAN 8 1/2 02/28/36
JAMAN 7 7/8 07/28/45
DOMREP 8 5/8 04/20/27
BAHAMA 7 1/8 04/02/38
PANAMA 7 1/8 01/29/26
DOMREP 6 7/8 01/29/26
TRITOB 4 3/8 01/16/24
BAHAMA 6 5/8 05/15/33
PANAMA 3 3/4 03/16/25
PANAMA 4 09/22/24
ARUBA 4 5/8 09/14/23
BERMUD 4.854 02/06/24
JAMAN 7 5/8 07/09/25
DOMREP 5 7/8 04/18/24
DOMREP 5 1/2 01/27/25
JAMAN 9 1/4 10/17/25
BAHAMA 6.95 11/20/29
COSTAR 5 5/8 04/30/43
COSTAR 7.158 03/12/45
COSTAR 7 04/04/44
ELSALV 7.1246 01/20/50
BAHAMA 5 3/4 01/16/24
DOMREP 6.6 01/28/24
ELSALV 7 5/8 02/01/41
ELSALV 7.65 06/15/35
COSTAR 6 1/8 02/19/31
ELSALV 7 5/8 09/21/34
COSTAR 4 1/4 01/26/23
COSTAR 4 3/8 04/30/25
ELSALV 6 3/8 01/18/27
ELSALV 8 5/8 02/28/29
ELSALV 5 7/8 01/30/25
SURINM 9 1/4 10/26/26
ELSALV 7 3/4 01/24/23
-500 -400 -300 -200 -100 0 100
Source: Bloomberg (BVAL) and CIBC Capital Markets – FICC Strategy.
CIBC Capital Markets & CIBC FirstCaribbean International Bank April 2021
Caribbean Market Overview – Q1 2021 6
Chart 4 Chart 5
Caribbean – BERMUD, TRITOB and BAHAMA Caribbean – JAMAN and DOMREP
YTM 7 YTM
8 DOMREP '45 DOMREP '60
BAHAMA '38 DOMREP '44 DOMREP '49
7 BAHAMA' 33 6 DOMREP
4/20/27 JAMAN '36 DOMREP '48
6 BAHAMA '29 5 JAMAN JAMAN '45
BAHAMA '24 10/17/25 JAMAN '39
DOMREP '30
5 4 DOMREP
4/18/24 DOMREP '28
4 TRITOB '27 3 DOMREP
JAMAN 7/9/25 1/25/27
3 TRITOB '24 DOMREP '26
2
BERMUD '27 DOMREP '25
2
BERMUD '24 1 DOMREP
1 Modified Duration
1/28/24
BERMUD '23 Modified Duration 0
0
0 2 4 6 8 10 12 14 16
0 2 4 6 8 10 12
Source: Bloomberg and CIBC Capital Markets – FICC Strategy Source: Bloomberg and CIBC Capital Markets – FICC Strategy
Chart 6 Chart 7
Central America – Panama, Costa Rica, and El ELSALV ‘25s vs. COSTAR ‘25s
Salvador
YTM 500
9 ELSALV '41
ELSALV '34
8 ELSALV '35 ELSALV '50
400
7 ELSALV '29 COSTAR '44
ELSALV '27 COSTAR '45 300
6 COSTAR '31
COSTAR '43
5 ELSALV '23 ELSALV '25 200
PANAMA '53
COSTAR '25
4 COSTAR '23 PANAMA '60
3 PANAMA '29 100
PANAMA '27 PANAMA '30 PANAMA '47
2 PANAMA '26 PANAMA '28
0
1 PANAMA '25
PANAMA '24 Modified Duration
0 -100
0 5 10 15 20 25 Apr-19 Aug-19 Dec-19 Apr-20 Aug-20 Dec-20 Apr-21
Source: Bloomberg and CIBC Capital Markets – FICC Strategy Source: Bloomberg and CIBC Capital Markets – FICC Strategy
Chart 8 Chart 9
COSTAR ‘45s vs. DOMREP ‘45s PANAMA ‘24s vs. BAHAMA ‘24s and BERMUD ‘24s
350 400
200
300
0
250 -200
-400
200
-600
150 -800
-1000
100 -1200 PANAMA '24s - BAHAMA '24s
-1400 PANAMA '24s - BERMUD '24s
50
-1600
0 -1800
Apr-19 Aug-19 Dec-19 Apr-20 Aug-20 Dec-20 Apr-21 Apr-19 Aug-19 Dec-19 Apr-20 Aug-20 Dec-20 Apr-21
Source: Bloomberg and CIBC Capital Markets – FICC Strategy Source: Bloomberg and CIBC Capital Markets – FICC Strategy
CIBC Capital Markets & CIBC FirstCaribbean International Bank April 2021
Caribbean Market Overview – Q1 2021 7
Table 1
Public Sector Fiscal Accounts and Debt 2021 or 2021/22
Primary/Adjusted Nominal Gross Government Net Public Sector Real
2021 or 2021/22 Balance Balance Debt Debt GDP Growth
% of GDP % of GDP % of GDP % of GDP % of GDP
Antigua and Barbuda -3.5% -5.8% 111.8% n.a. -3.0%
Aruba -13.0% -18.6% 130.3% 88.6% 5.0%
The Bahamas -8.9% -12.5% 88.6% 82.7% 2.0%
Barbados 1.5% -2.8% 146.5% 141.5% 4.1%
Belize -6.9% -10.8% 134.6% 129.6% 1.9%
Bermuda -1.0% -2.8% 44.5% 8.2% 5.0%
Cayman Islands 1.2% 0.8% 4.7% n.a. 5.0%
Costa Rica -2.0% -7.5% 76% n.a. 2.7%
Dominica 0.9% -0.8% 100.2% n.a. -0.4%
Dominican Republic -0.7% -3.0% 60.0% n.a 5.0%
El Salvador -5.0% -9.0% 100.0% n.a. 5.0%
Grenada 1.5% -0.9% 74.4% n.a. -1.5%
Jamaica 6.1% -0.4% 100.0% 91.8% 1.5%
Panama -4.1% -7.5% 78% n.a. 5.0%
St. Kitts and Nevis -3.6% -5.5% 72.5% n.a. -2.0%
St. Lucia -3.0% -6.6% 91.3% n.a. 3.1%
St. Vincent and the Grenadines -3.6% -6.0% 91.7% 89.0% -0.1%
Suriname -6.2% -16.4% 157.4% n.a. 0.7%
Trinidad and Tobago -4.5% -8.5% 61.6% n.a. 2.1%
Sources: IMF, Bloomberg, CIBC Capital Markets, Standard and Poor's, Moody’s.
NA: Not available.
Table 2
Ratings of Caribbean Sovereigns
Ratings Key
2021 Ratings Investment Grade High Yield
S&P Moody’s S&P Moody’s S&P Moody’s
Aruba BBB NA AAA Aaa BB+ Ba1
The Bahamas BB- Ba2 AA+ Aa1 BB Ba2
Barbados B- NA AA Aa2 BB- Ba3
Bermuda A+ A2 AA- Aa3 B+ B1
Cayman NA Aa3 A+ A1 B B2
Costa Rica B B2 A A2 B- B3
Dominican Republic BB- Ba3 A- A3 CCC+ Caa1
El Salvador B- B3 BBB+ Baa1 CCC Caa2
Jamaica B+ B2 BBB Baa2 CCC- Caa3
Panama BBB Baa2 BBB- Baa3 CC Ca
Trinidad and Tobago BBB- Ba1
Sources: Bloomberg, S&P, and Moody’s
CIBC Capital Markets & CIBC FirstCaribbean International Bank April 2021Caribbean Market Overview – Q1 2021 8
Table 3
Caribbean Bonds and Indicative Prices/Spreads (April 8, 2021)
Aruba
Bond Price Yield 3m Yield Change Z-Spread S&P Moody's Fitch
ARUBA 4 5/8 09/14/23 103.06 3.30% -0.20 177.32 BBB NR BB
Bahamas
Bond Price Yield 3m Yield Change Z-Spread S&P Moody's Fitch
BAHAMA 5 3/4 01/16/24 100.48 5.55% -59.84 510.83 BB- Ba2 NA
BAHAMA 6.95 11/20/29 100.87 6.81% -18.20 535.15 BB- Ba2 NA
BAHAMA 6 5/8 05/15/33 91.06 7.78% 8.94 605.10 BB- Ba2 NA
BAHAMA 7 1/8 04/02/38 89.13 8.33% 23.75 650.29 BB- Ba2 NA
Barbados
Bond Price Yield 3m Yield Change Z-Spread S&P Moody's Fitch
BARBAD 6 1/2 10/01/29 102.48 6.12% -18.54 477.50 B- NA NA
Bermuda
Bond Price Yield 3m Yield Change Z-Spread S&P Moody's Fitch
BERMUD 4.138 01/03/23 105.74 0.78% -14.65 42.21 A+ A2 NA
BERMUD 4.854 02/06/24 110.40 1.09% -2.86 55.01 A+ A2 NA
BERMUD 3.717 01/25/27 109.26 2.01% 32.28 84.09 A+ A2 NA
BERMUD 3.717 01/25/29 116.80 2.39% 54.28 92.37 A+ A2 NA
Costa Rica
Bond Price Yield 3m Yield Change Z-Spread S&P Moody's Fitch
COSTAR 4 1/4 01/26/23 100.45 3.98% -117.43 360.60 B B2 B
COSTAR 4 3/8 04/30/25 99.79 4.43% -128.46 364.21 B B2 B
COSTAR 6 1/8 02/19/31 102.10 5.84% -98.94 432.68 B B2 B
COSTAR 5 5/8 04/30/43 89.65 6.52% -26.59 457.61 B B2 B
COSTAR 7 04/04/44 98.45 7.14% -39.81 523.96 B B2 B
COSTAR 7.158 03/12/45 99.19 7.23% -37.40 532.62 B B2 B
Dominican Republic
Bond Price Yield 3m Yield Change Z-Spread S&P Moody's Fitch
DOMREP 5 7/8 04/18/24 107.94 3.10% -9.62 140.99 BB- Ba3 NA
DOMREP 6.6 01/28/24 113.04 1.79% -62.12 132.61 BB- Ba3 NA
DOMREP 5 1/2 01/27/25 110.43 2.59% -10.37 188.32 BB- Ba3 NA
DOMREP 6 7/8 01/29/26 116.77 3.09% 13.88 217.55 BB- Ba3 BB-
DOMREP 5.95 01/25/27 113.41 3.38% 23.14 226.68 BB- Ba3 BB-
DOMREP 8 5/8 04/20/27 122.63 4.32% 25.36 264.95 BB- Ba3 BB-
DOMREP 6 07/19/28 113.51 3.85% 43.80 252.07 BB- Ba3 BB-
DOMREP 4 1/2 01/30/30 102.36 4.18% 57.81 265.94 BB- Ba3 BB-
DOMREP 7.45 04/30/44 120.23 5.84% 44.13 391.99 BB- Ba3 BB-
DOMREP 6.85 01/27/45 112.99 5.83% 48.03 389.48 BB- Ba3 BB-
DOMREP 6 1/2 02/15/48 108.84 5.84% 48.80 389.69 BB- Ba3 BB-
DOMREP 6.4 06/05/49 107.78 5.83% 47.96 388.28 BB- Ba3 BB-
DOMREP 5 7/8 01/30/60 98.66 5.96% 61.21 401.51 BB- Ba3 BB-
El Salvador
Bond Price Yield 3m Yield Change Z-Spread S&P Moody's Fitch
ELSALV 7 3/4 01/24/23 105.24 4.65% -399.81 425.35 B- B3 B-u
ELSALV 5 7/8 01/30/25 100.96 5.59% -197.49 485.43 B- B3 B-u
ELSALV 6 3/8 01/18/27 100.80 6.21% -143.37 511.52 B- B3 B-u
ELSALV 8 5/8 02/28/29 108.91 7.12% -155.53 577.53 B- B3 B-
ELSALV 8 1/4 04/10/32 106.33 7.40% -117.23 580.72 B- B3 B-u
ELSALV 7 5/8 09/21/34 99.95 7.63% -103.44 590.25 B- B3 B-u
ELSALV 7.65 06/15/35 101.45 7.48% -91.09 574.76 B- B3 B-u
ELSALV 7 5/8 02/01/41 100.13 7.61% -86.85 577.13 B- B3 B-u
ELSALV 7.1246 01/20/50 93.80 7.66% -44.53 573.40 B- B3 B-
CIBC Capital Markets & CIBC FirstCaribbean International Bank April 2021Caribbean Market Overview – Q1 2021 9
Jamaica
Bond Price Yield 3m Yield Change Z-Spread S&P Moody's Fitch
JAMAN 7 5/8 07/09/25 116.49 3.41% -6.24 166.04 B+ B2 B+u
JAMAN 9 1/4 10/17/25 122.19 3.85% -17.98 303.03 B+ B2 B+u
JAMAN 6 3/4 04/28/28 118.12 3.79% 33.06 225.56 B+ B2 B+u
JAMAN 8 1/2 02/28/36 138.94 4.81% 32.54 301.53 B+ B2 B+u
JAMAN 8 03/15/39 137.72 4.83% 48.14 288.57 B+ B2 B+u
JAMAN 7 7/8 07/28/45 136.19 5.23% 28.86 328.94 B+ B2 B+u
Panama
Bond Price Yield 3m Yield Change Z-Spread S&P Moody's Fitch
PANAMA 4 09/22/24 109.11 1.29% 5.07 54.62 BBB Baa2 BBB-
PANAMA 3 3/4 03/16/25 109.01 1.39% 8.65 57.05 BBB Baa2 BBB-
PANAMA 7 1/8 01/29/26 124.34 1.80% 18.09 90.75 BBB Baa2 BBB-
PANAMA 8 7/8 09/30/27 138.45 2.42% 41.88 123.34 BBB Baa2 BBB-
PANAMA 3 7/8 03/17/28 110.00 2.30% 45.08 98.87 BBB Baa2 BBB-
PANAMA 9 3/8 04/01/29 147.20 2.74% 56.61 138.86 BBB Baa2 BBB-
PANAMA 3.16 01/23/30 104.92 2.53% 55.35 100.23 BBB Baa2 BBB-
PANAMA 6.7 01/26/36 135.81 3.56% 69.84 162.80 BBB Baa2 BBB-
PANAMA 4 1/2 05/15/47 111.52 3.80% 75.90 177.20 BBB Baa2 BBB-
PANAMA 4 1/2 04/16/50 111.48 3.84% 71.35 180.67 BBB Baa2 BBB-
PANAMA 4.3 04/29/53 108.32 3.85% 73.99 182.47 BBB Baa2 BBB-
PANAMA 3.87 07/23/60 100.32 3.85% 67.78 184.61 BBB Baa2 BBB-
Trinidad and Tobago
Bond Price Yield 3m Yield Change Z-Spread S&P Moody's Fitch
TRITOB 4 3/8 01/16/24 105.53 2.29% 11.47 181.01 BBB- Ba1 NA
TRITOB 4 1/2 08/04/26 106.80 3.10% 45.90 205.98 BBB- Ba1 NA
Source: Bloomberg (BVAL) and CIBC Capital Markets – FICC Strategy
CIBC Capital Markets & CIBC FirstCaribbean International Bank April 2021Caribbean Market Overview – Q1 2021 10 Caribbean Economic Review CIBC Capital Markets & CIBC FirstCaribbean International Bank April 2021
Caribbean Market Overview – Q1 2021 11
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Caribbean Economic Review Tiffany Grosvenor-Drakes
CIBC FirstCaribbean
The unprecedented COVID-19 pandemic shocked the world in 2020, stunning global financial markets, stifling productive
activity, and pushing oil prices to unrivaled lows. While liquidity injections by major central banks aided in the reclamation
of sentiment on equity markets, global economic output suffered a 3.3% contraction at the hands of the pandemic (IMF
April 2021 estimate), and oil prices remained around 20% lower y/y at December 2020. Following deep Q2 declines, real
GDP in the region’s major trading partners recovered somewhat in Q3 consistent with the reopening of economies that
tailed the flattening of the initial wave of infections. However, virus resurgence and the ensuing reintroduction of
restrictions interrupted recovery progress in Q4. Real GDP in the US and Canada declined 3.5% and 5.4%, respectively,
overall in 2020, as federal governments’ sizeable fiscal stimulus and reduced import demand partially counteracted the
impact of containment measures on exports, private consumption and investment, while real economic output in the UK
contracted 9.9%, amid tense talks on the post-Brexit trade deal sealed in December. Meanwhile, the launch of vaccine
distribution in some markets in December has increased hope for a turning point of the global crisis, but the race against
new waves and variants of infection remained a real threat. However, since December 2020, the price of WTI crude oil
strengthened 24% to US$60/barrel by the end of March 2021, signaling increased demand.
Despite the reopening of most borders since the initial collapse in Q2, the global travel industry remained scarred
throughout the year. The reintroduction of travel restrictions and lockdowns in response to new waves and rising cases
both domestically and in the region’s major source markets, particularly in Q4, continued to thwart the Caribbean’s tourism
recovery. Consequently, stay-over arrivals to the region fell approximately 70% y/y in 2020, while cruise-based operations
remained largely suspended. The decimation of tourism activity in tandem with the impact of business interruption on
private consumption and investment generated a steep economic fall-out for the largely tourism-dependent region. Most
markets, including Aruba, Barbados, Bahamas, Belize, Curaçao, Sint Maarten and Turks and Caicos Islands, are
estimated to have registered double-digit declines in real GDP, although the impact for Curaçao also stemmed from a
plunge in manufacturing output. Meanwhile, the resilience of the international financial sector likely cushioned the tourism
blow restricting the decline to single-digits for Cayman Islands and Bermuda, while commodity exporters, Suriname and
Trinidad, also suffered a major, but relatively less severe economic impact due to the global contraction of demand.
Exceptionally though, Guyana’s surge in oil production overtook the slump in non-oil output, likely posting Guyana as the
only market in the region to record positive economic growth in 2020.
The lower global energy prices compressed regional consumer price inflation over the twelve months ended December
2020. Regional consumer prices (excluding Suriname) rose 0.4% y/y, a moderate deceleration from 1.9% y/y recorded
one year earlier, and reflecting either price declines or slower inflation in all markets except Antigua and Barbuda, Belize,
Dominica and Trinidad and Tobago. Meanwhile, consumer prices in Suriname surged 61.0% y/y during December 2020,
up from 4.3% y/y during December 2019 as prices continued to rise following the close to 90% devaluation of the
Surinamese dollar against the US dollar in September 2020.
Chart 1 Chart 2
Trends in Regional1 Tourist Arrivals Regional2 Loan and Deposit Growth (y/y; %)
20 12-mth moving (mln) 10
Total Stay-Over Arrivals (R)
10 average 8 Total Deposits
Growth in Tourist Arrivals (L)
0 growth (%)
6 Total Loans
-10
-20 4
-30 2
-40 0
-50
-2
-60
-70 -4
-80 -6
Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 Sep-20
Source: Caribbean Tourism Organization, Eastern Caribbean Central Bank and CIBC FirstCaribbean. Source: Regional authorities and CIBC FirstCaribbean.
1 Caribbean region includes: Anguiilla, Antigua and Barbuda, Aruba, the Bahamas, Barbados, Belize, British Virgin Islands, Cayman Islands, Curaçao, Dominica, Grenada, Jamaica, St. Kitts and Nevis, St. Lucia,
St. Maarten and St. Vincent and the Grenadines.
2 Caribbean region includes: Anguilla, Antigua and Barbuda, Aruba, the Bahamas, Barbados, Belize, Curaçao, Dominica, Grenada, Jamaica, St. Kitts and Nevis, St. Lucia, St. Maarten, St. Vincent and the Grenadines, Trinidad and Tobago, and
Turks and Caicos Islands.
CIBC Capital Markets & CIBC FirstCaribbean International Bank April 2021Caribbean Market Overview – Q1 2021 12
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Despite efforts to reduce spending by a few, the slump in regional economic activity and resulting collapse in government
revenues generated a sharp deterioration in the fiscal accounts of all regional Governments except Dominica, where
reduced spending more than compensated for revenue losses resulting in a lower deficit in 2020 relative to 2019. The IMF
and other multilateral financial institutions quickly responded to the increased financing needs of most governments, while
the Netherlands provided zero-interest bullet loans to Aruba, Curaçao and Sint Maarten, and some governments,
including Bahamas, Bermuda and Trinidad and Tobago, also raised funding on the international capital market, generating
a ballooning of external borrowing by the region during year. Consequently, latest available data suggest escalating
sovereign debt ratios across all markets except, the Cayman Islands and Guyana, and a reversal of the downward
trajectory for Barbados, Jamaica, and Grenada, in particular. Remarkably, the Governments of the Cayman Islands and
the Turks and Caicos Islands relied on fiscal savings to support their respective operations, although the latter secured a
credit facility in late December 2020, following no new borrowing during the year. Further, the stress on public purses
prompted a wave of sovereign credit rating downgrades that hit Bahamas, Belize, Curaçao, Trinidad and Tobago, and
Suriname in 2020, and more recently, Aruba and Sint Maarten in March 2021. Moreover, the Governments of Suriname
and Belize faced default during the year, with the former now in technical discussions with the IMF regarding its request
for a funded macroeconomic reform program amid ongoing discussions with bondholders.
Although export receipts dwindled, the region’s high reliance on external borrowing in 2020 served to strengthen FX
reserves of tourism dependent countries, supported by reduced import outflows associated with the weaker domestic
environments and lower oil prices. In contrast, Suriname’s primary dependence on Central Bank financing coincided with
a fall in FX reserves, while reserves in Trinidad and Tobago rose only marginally during 2020 as external proceeds,
including more than of US$1bln withdrawn from the Heritage Stabilization Fund, barely mitigated the tightening conditions
on the foreign exchange market. Meanwhile, the use of external funding for budgetary support, against the backdrop of
measures taken by regional central banks to augment domestic liquidity in the early stages of the pandemic, led to a sharp
rise in banks’ excess liquidity across most markets. However, banks’ asset quality deteriorated in the latter half of the year
as initial loan moratoria offered to clients came to an end, while banks’ net income shrank on account of lower interest
revenue and heightened provisions for expected credit losses. Capital adequacy also nudged downward, but ratios
generally remained in excess of regulatory minimums.
Very recently, the IMF revised upward its projection for the global economic rebound in 2021 to 6.0% (April 2021 World
Economic Outlook), from the 5.5% projected in January 2021, and the 4.4% projected in October 2020. The Fund based
its most recent revision on supplementary fiscal stimulus in a few major economies and the potential for a vaccine
strengthened recovery over the latter half of the year, but cautioned however, that ongoing uncertainty and the growing
challenge of uneven vaccine progress across the globe could alter the course of post-crisis economic growth. In contrast,
expectations for the Caribbean’s recovery in 2021 have declined over time, in line with surging cases, fresh travel
restrictions and new lockdowns in most markets, and a more measured rebound in tourism activity than initially
anticipated. Further, despite concerted efforts to roll out vaccination programs across the region, access has been choppy
with the Caymans Islands administering at least a first dose to over 45% of its population by the end of March, but at other
end of the spectrum, several territories not achieving any material headway. Meanwhile, the protracted regional recovery
implies extended fiscal ramifications and even higher public debt levels in 2021, highlighting an immediate need for most
Governments to develop targeted fiscal programmes that cover the post-crisis medium term.
Chart 3
Regional3 Inflation and Intl. Commodity Prices (y/y; %)
5 110
Regional Inflation Rate (L) 90
4 Growth in International Oil Prices* (R)
70
Growth in International Food Prices+ (R)
3 50
30
2
10
1 -10
-30
0
-50
-1 -70
Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20
Source: Regional authorities, International Monetary Fund and CIBC FirstCaribbean.
* Average of U.K. Brent, Dubai and West Texas Intermediate + International Monetary Fund Food Index.
3Caribbean region includes Anguilla, Antigua and Barbuda, Aruba, Barbados, Belize, British Virgin Islands, Cayman Islands, Curaçao, Dominica, Grenada, Jamaica, St. Kitts and Nevis, St. Lucia, St. Maarten, St.
Vincent and the Grenadines and Trinidad and Tobago.
CIBC Capital Markets & CIBC FirstCaribbean International Bank April 2021Caribbean Market Overview – Q1 2021 13
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Antigua and Barbuda Tiffany Grosvenor-Drakes
CIBC FirstCaribbean
Production, Prices, and Employment
The impact COVID-19 pandemic likely crippled economic activity in Antigua and Barbuda during 2020. The Eastern
Caribbean Central Bank’s (ECCB) latest estimates suggest that real GDP contracted 18.3% in 2020.
• Tourism output plummeted during the year with total visitor arrivals and visitor spending lower by 62.2% y/y and
54.4% y/y, respectively. Broad based declines from all major source markets reduced total stay-over arrivals by
58.4% y/y, while cruise ship passenger arrivals fell 64.7% y/y in line with 62.6% fewer ship calls. Yacht passenger
arrivals also shrank 29.3% y/y. The fall-off in the hotel and restaurant sector coupled with COVID-19 restrictions
and travel protocols likely curtailed output in wholesale and retail trade, transport storage and communication, and
other related sectors.
• Meanwhile, indicators of construction and investment activity also imply subdued output. Imports of inedible crude
materials except fuels fell 19.4% y/y, while imports of machinery and transport equipment declined 28.7% y/y.
However, a 28.1% y/y contraction in total imports led to a US$177.8mln improvement in Antigua and Barbuda’s
trade balance to a US$472.1mln deficit during 2020.
Consumer prices rose 2.8% y/y during December 2020 as the prices of food and non-alcoholic beverages and transport
rose 1.9% y/y and 11.9% y/y, respectively, but the price of housing, utilities, gas and fuels fell 2.7% y/y.
Developments in Financial Markets
Commercial banks loans and advances expanded 2.9% between January and December 2020. Meanwhile, deposit
balances dipped 0.9% as demand and time deposits fell 3.4% and 8.9%, respectively, but savings deposits rose 3.8%.
Consequently, the loan to deposit ratio rose 2.7 percentage points to 73.2% at December 2020.
The average interest rate spread narrowed 91bps y/y to 6.09% at December 2020 as the weighted average lending rate
fell 95bps to 7.58% and the weighted average deposit rate declined 4bps to 1.49%.
Banks’ loan quality, profitability and capital adequacy fell during 2020.
• Banks’ non-performing loan ratio rose from 5.3% at December 2019 to 6.3% at December 2020. The annualised
return on assets fell from 1.44% at the end of Q4 2019 to 0.42% at the end of Q4 2020, while the capital
adequacy ratio declined 4.7 percentage points to 34.6% over the same period.
Chart 1
Stay-Over Tourist Arrivals Chart 2
Inflation (y/y; %)
3,000 (US$/person) (000's) 320 5 All Items (L)
300 Food (L)
4
280
2,500 260 3
240 2
220
2,000 1
200
180 0
1,500 Visitor Expenditure/person (L) 160 -1
Stay-Over Arrivals (R) 140
120 -2
1,000 100 -3
Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20 2015Q4 2016Q4 2017Q4 2018Q4 2019Q4 2020Q4
Source: Eastern Caribbean Central Bank and CIBC FirstCaribbean, Caribbean Tourism Organization. Source: Eastern Caribbean Central Bank and CIBC FirstCaribbean.
CIBC Capital Markets & CIBC FirstCaribbean International Bank April 2021Caribbean Market Overview – Q1 2021 14
2-
Government Debt
The Government of Antigua and Barbuda reports that lower current spending mitigated the revenue losses associated
with the pandemic containing the fiscal deficit to US$74.9mln (5.4% of GDP) in 2020, relative to a US$61.7mln deficit in
2019.
• A US$13.1mln (31.4% y/y) fall-off in Citizenship by Investment (CBI) receipts underpinned a US$14.1mln decline
in non-tax revenue, while tax receipts fell US$23.0mln (9.2% y/y). Taxes on income and profits rose US$3.0mln,
likely reflecting business performance in the previous year, but taxes on property, domestic goods and services,
and international trade and transactions declined US$3.9mln (37.0% y/y), US$15.5mln (13.7% y/y), and
US$6.6mln (6.9% y/y), respectively. Capital revenue nudged upward US$0.8mln (69.4% y/y).
• Meanwhile, the Government’s current spending declined US$29.7mln (8.6% y/y). Outlays for goods and services
contracted US$13.0mln (23.1% y/y), while expenditure on personal emoluments, transfers and subsidies and
interest fell US$3.1mln (2.1% y/y), US$6.6mln (6.8% y/y) and US$6.9mln (16.1% y/y), respectively. However,
capital spending rose US$6.6mln (20.7% y/y) during 2020.
Debt statistics for 2020 remained unavailable, but public debt likely increased since December 2019, when it stood at
US$640.5mln (75.6% of GDP – ECCB estimate). Apart from US$13mln in emergency financing from the CDB,
Government financed its deficit largely from domestic sources, but a build-up of arrears was also evident during the year.
Outlook
Following the steep contraction in 2020, the ECCB expects real economic output will grow by 3.4% in 2021 propelled
largely by an uptick in the activity of the hotel and restaurant sector and an expansion in construction output. Against the
backdrop of a surge of infections over the first two months the year, the vaccination of greater than 27% of the population
by the end of March boosted the Government’s optimism for the tourism recovery during the year. However, while the
return of some productive activity is likely to improve revenue collection during 2021, the continuous on-going build-up of
arrears remains a concern for fiscal sustainability.
Chart 3 Chart 4
Public Sector Debt Outstanding Growth in Key Balances (y/y; %)
1,300 (US$mln) 15 Loans
Deposits
1,250 10
1,200
5
1,150
0
1,100
1,050 -5
1,000 -10
2015Q4 2016Q4 2017Q4 2018Q4 2019Q4 2015Q4 2016Q4 2017Q4 2018Q4 2019Q4 2020Q4
Source: Eastern Caribbean Central Bank and CIBC FirstCaribbean. Source: Eastern Caribbean Central Bank and CIBC FirstCaribbean.
CIBC Capital Markets & CIBC FirstCaribbean International Bank April 2021Caribbean Market Overview – Q1 2021 15
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Aruba Tiffany Grosvenor-Drakes
CIBC FirstCaribbean
Production, Prices, and Employment
The Centrale Bank van Aruba estimates that the decimation of tourism activity alongside the fall-off in private consumption
and investments led to a 26.4% collapse of economic output in 2020.
• Total stay-over arrivals contracted 67.0% y/y during the year corresponding to a 64.8% y/y decline in total visitor
nights. Arrivals from the US, which typically account for greater than two-thirds of stay-over visitors slumped
64.7% y/y, while arrivals from Latin America and Europe fell 84.2% y/y and 69.7% y/y, respectively. Meanwhile,
the number of cruise-based tourists to Aruba shrank 69.3% y/y, in line with a similar drop in ship-calls relative to
2019.
• Investment activity is estimated to have declined 22.5% y/y largely attributed to restrictions implemented by the
Government and delays in large construction projects. Despite an 88.4% y/y expansion in the value of
construction permits granted, imports of cement declined 25.1% y/y and the number of the electrical installations
approved fell 51.3% y/y, during the first three quarters on 2020.
• Job losses associated with the Covid-19 pandemic and related fall-offs in disposable income led to a reduction in
consumer spending. The Centrale Bank van Aruba estimates that private consumption contracted 16.2% y/y.
Consumer prices fell 3.0% y/y in December 2020, relative to a 3.5% y/y increase one year earlier, likely reflecting the fall-
off in imported commodity prices and the weaker domestic economy.
Developments in Financial Markets
Commercial banks’ loan growth slowed sharply during 2020, but deposit accumulation strengthened likely reflecting the
deployment of external financial assistance in the domestic economy.
• Loans and advances registered a 0.2% y/y uptick as a 1.8% y/y decline in lending to businesses eclipsed a 1.0%
y/y expansion in total retail lending. Specifically, mortgage loans advanced 2.8%, but consumer loans fell 6.1%.
• Deposit balances grew 4.9% y/y as demand, savings and time deposits rose 7.1% y/y, 4.5% y/y and 0.4% y/y,
respectively.
• Consequently, banks’ loan-to-deposit ratio fell 3.5 percentage points y/y to 73.6% at December 2020.
The weighted average lending rate rose 60bps y/y to 6.7% at December 2020, but the weighted average deposit rate fell
30bps y/y to 1.7% at the end of the same period.
Loan quality began to display signs of deterioration as the non-performing loan ratio rose 2.0 percentage points y/y to
5.0% at December. However, regulatory capital to risk-weighted assets climbed 2.6 percentage points y/y to 33.5%, far in
excess of the 16% stipulated requirement.
Chart 1 Chart 2
Real GDP and Unemployment (%) Growth in Tourist Arrivals and Length of Stay
10 12 1,200 12-month (nights) 9
1,100 rolling 8
5
10 000's of
0 1,000 persons 7
8 900 6
-5
800 5
-10 6
700 4
-15
4 600 Tourist Arrivals (L) 3
-20 Length of Stay (R)
500 2
Real GDP Growth (L) 2
-25 400 1
Unemployment Rate (R)
-30 0 300 0
2012 2013 2014 2015 2016 2017 2018 2019 2020 Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Dec-20
Source: Centrale Bank van Aruba and CIBC FirstCaribbean. Source: Caribbean Tourism Organization, Centrale Bank van Aruba and CIBC FirstCaribbean.
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