Aruba Outlook Negative

S&P has changed its outlook on Aruba’s A minus rating to negative from stable to reflect the rapid growth in the Aruban government’s debt burden due to both the recent global downturn and structural factors such as a narrowing tax base. The agency says general government debt could exceed 51% of GDP this year compared to only 41% in 2008, and could approach 55% to 60% of GDP by 2015. Such a level of debt for a small, open economy with a fixed exchange rate would risk weakening its creditworthiness, possibly leading S&P to lower the ratings by one notch.