Bonaire’s economy grew by almost 12 percent in 2021

News item | 28-09-2023 | 17:35

In 2021, Bonaire’s economy grew by almost 11.7 percent after the substantial contraction of 8.4 percent in 2020. On St Eustatius, the economy grew by 21.1 percent, despite tourism having barely recovered from the coronavirus crisis. The growth was mainly driven by a few large companies on the island. On Saba, the economy grew by 3.0 percent. This is evident from new figures released by Statistics Netherlands (CBS).

The high growth in 2021 brings Bonaire's GDP, adjusted for price developments, above the 2019 level, before the COVID-19 pandemic. This is not the case for St Eustatius and Saba. In 2021, St Eustatius’ GDP was still 10 percent below the 2019 level, while Saba’s GDP was more than 3 percent lower than in 2019.

Growth on Bonaire driven by tourism recovery

The number of tourists visiting Bonaire by air increased from 66.0 thousand in 2020 to 111.3 thousand in 2021. This was due to fewer travel restrictions, among other reasons.

As a result, the value added of the accommodation and food services sector and the culture and recreation sector, casinos and diving schools in particular, was up by 47.1 and 28.1 percent, respectively. The trade sector also benefited from increased tourism; its value added rose by 19.0 percent.

There was also more demand for business services. Tourists' demand for rental cars, for example, was up, but strong growth was also recorded at employment agencies, notaries and accounting firms. The total value added in business services rose by 17.7 percent.

In the construction sector, the strong growth of recent years continued. The value added of construction companies grew by 10.2 percent in 2021. The manufacturing sector, as a major supplier to the construction sector, also benefited from increased demand for construction services; its value added rose by 15.6 percent.

Agriculture and mining and quarrying was the only sector that contracted in 2021. This is mainly due to less mineral extraction.

Substantial growth on St Eustatius

The substantial economic growth of 21.1 percent on St Eustatius was mainly driven by a few large companies on the island. Their production is mainly export-oriented and dependent on oil demand in the region. Demand for their products and services fell in 2020 due to the COVID-19 pandemic and remained at that lower level during 2021. Even so, their value added increased as they managed to reduce operating costs in 2021.

Although these companies have a substantial impact on St Eustatius’ GDP, their impact on national income is limited. The profits of these companies are not included in the national income because they are wholly foreign-owned enterprises; they contribute to the island’s labour income in particular.

Relative to 2017, the volume of GDP on St Eustatius fell by 38 percent in 2021, from 142 million to 103 million US dollars (in 2017 prices). This was due to a number of factors. In 2018, hurricane Irma caused major damage on the island. In 2019, a number of large companies were greatly hampered by regional developments in the oil sector, which reduced demand for oil storage. On top of that, the COVID-19 pandemic struck in 2020, further reducing demand for oil storage and the number of tourists visiting the island. In 2021, the economy had not yet returned to pre-pandemic levels, as sectors that had been hit hard, such as accommodation and food services and transport, saw only slight growth in 2021. This was mainly because fewer tourists came to the island in 2021 than in 2019, the period before the coronavirus crisis. During that year, 10.5 thousand tourists visited St Eustatius by air, while in 2021 there were 3.6 thousand.

Slight recovery for Saba due to more inbound tourism

The number of tourists visiting Saba by air increased from 2.7 thousand in 2020 to 4.0 thousand in 2021, as Saba resumed welcoming tourists from low-risk countries as from 1 May 2021. This resulted in higher demand for restaurant, hotel and taxi services as well as electricity on the island, which grew Saba’s GDP by 3.0 percent in 2021. Growth was tempered by a decline in value added in public administration and education.