Sint Maarten Real GDP for 2022 is estimated to have increased by 13.9% | SOUALIGA NEWSDAY

SINT MAARTEN (GREAT BAY) - The Department of Statistics (STAT) reports an increase in the real Gross Domestic Product (GDP) for the year 2022, with an estimated growth of 13.9 per cent when measured in constant 2018 prices (that is, after removing the effect of price changes).

This followed an expansion of 7.1 per cent in 2022 Between 2019 and 2020 real GDP decreased by 20.4 percent, largely as a result of the COVID-19 pandemic. It then recovered between 2020 and 2021, increasing by 7.1 per cent, before the 13.9 per cent increase in 2022 noted above, leaving real GDP only slightly lower around 3.0 per cent than it was in 2019. The most recent increase reflects the country’s ongoing efforts to stabilize and recover from the impacts of the pandemic.

The largest contribution to the 13.9 per cent increase in real GDP in 2022 came from Transportation and storage (taxi’s, public busses, Car rentals, Container shipments, warehouse rental etc.) which experienced an increase of 47.3 per cent growth contributing 4.1 percentage points to the overall increase. The second major contributor was the Wholesale and Retail sector (grocery stores, clothing shops, electronic stores etc.) which experienced a 27.7 per cent growth compared to 2021 and contributed 3.2 percentage points to the overall increase of 13.9 per cent.

The next largest contribution to the recovery in 2022 was from the Accommodation and Food Services sector (hotels, guest houses, restaurants, take-ways, catering, etc.), which is highly dependent on cruise and stayover tourism arrivals, for which the estimated increase was 45.7 per cent, contributing a further 2.9 percentage points to the overall growth.

Taken together, these three dynamic performances alone contributed a total of 10.2 percentage points to the overall increase in real GDP of 13.9 per cent which underscores their substantial impact on the overall expansion of the economy. In current prices, which includes the impact of price changes, GDP witnessed a substantial 16.6 per cent year-on-year increase, reaching ANG 2.6 billion.

In the fiscal year 2023, the Department of Statistics underwent a comprehensive evaluation of its statistical processes with the assistance of the International Monetary Fund’s regional technical assistance centre (CARTAC).

This assessment led to the implementation of methodological changes and the incorporation of diagnostic checks into the compilation procedure. Furthermore, significant streamlining efforts were introduced to enhance the primary survey used for GDP compilation. These improvements led to some revision to the estimates for GDP for earlier years.

The methodology used for estimating GDP by production in constant prices is the ‘single indicator’ method. This involves either i) extrapolating the base year level of output (which is the amount of production) for each economic activity with a volume index (usually based on the physical quantity of the product produced by the activity, for example the kilowatt hours of electricity produced for the electricity generation sector) or, ii) dividing the nominal value of output in each year with a price index (a procedure referred to as ’deflation).

The constant price value of the purchases used to produce the output - technically referred to as the Intermediate Consumption (IC) – is then estimated in constant prices on the assumption that the ratio of IC/output ratio is unchanged since the base year.

The underlying assumption here is that the technology used to produce the output is reasonably stable in the periods since the last base year. Gross value added, or GVA, is then derived as balancing item, that is output minus IC.

The survey conducted in 2023 encompassed final financial data for 2021, based on financial statements, and estimates for 2022 obtained from businesses and organizations. STAT extends its appreciation for the ongoing collaboration with the business community and emphasizes the confidential handling of all received data.

It is reiterated that individual company information remains undisclosed, as all reports are presented at an aggregate level. The data serve as a valuable resource for the government, enabling the formulation of well-informed policies and decisions to foster continued economic growth.

STAT will continue to work to improve the overall quality of the estimates of GDP, including working with other government departments to make use of existing data holdings, STAT is also excited to explore the potential to incorporate additional information on trade flows using the recently announced ASYCUDA system which would be used to measure the value and volume of external trade into the GDP calculations.

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