Purchasing power improved in the Caribbean Netherlands
The median purchasing power went up for all three islands in 2012. On Bonaire it rose by 3.2 percent while St Eustatius and Saba experienced even stronger growth with 4.5 percent and 4.6 percent respectively.
In 2013 the average purchasing power rose as well, but not as markedly as in the previous year. It rose by 1.4 percent for people on Bonaire and 1.8 percent for residents of Saba. The strongest improvement was on St Eustatius, with 2.6 percent.
Bonaire lost more purchasing power
Not everyone saw positive effects. Variations are always a given due to factors such as pay rises and changes in labour market position, tax rates or household composition. On Bonaire, 45 percent of the local population lost spending power in 2013. On St Eustatius and Saba, 41 and 42 percent of the population respectively were affected. In 2012, the loss was much less significant on Bonaire and Saba.
More spending power for households with young children
People in households with minor children gained more spending power compared to those in households without minors. In 2012, spending power for this group improved the most on Saba with 6.8 percent, followed by 5.2 percent on St Eustatius and 4.6 percent on Bonaire. In 2013 as well, people in households with children benefited more in relative terms.
Marked rise in spending power of working people and those on benefits on St Eustatius
In 2013, the purchasing power of working people on St Eustatius improved more than on the other two islands, namely by 3.1 percent versus 1.8 percent on Bonaire and 2.2 percent on Saba. Those on social benefits were also better off on St Eustatius, with 2.2 percent more spending power in 2013. The same group on Bonaire and Saba saw a relatively minor increase with 0.8 percent and 1.8 percent respectively.
Factors influencing purchasing power
The purchasing power is determined by external factors including increases in CLA wages, inflation, changes in tax rates, indexation of social benefits and individual factors such as promotion, involuntary dismissal, change of jobs and retirement. Changes in household composition such as the birth of a child or a divorce also affect purchasing power.
Example: AOV benefit
The local old-age insurance (Algemene ouderdomsverzekering, AOV) on Bonaire was raised by 2.2 percent in 2013, from 7 215 US dollars to 7 371 US dollars. On the other hand, prices also went up by 1.7 percent in 2013. The increase in real terms was therefore 0.5 percent, nearly equal to the median change in purchasing power for people on Bonaire aged 60 and over (0.4 percent). For these people, who are receiving old-age benefits, the actual change in purchasing power is nearly entirely due to the rise in their benefits in real terms (source: Rijksdienst Dutch Caribbean).