Did COVID-19 affect purchasing power in the Caribbean Netherlands?
In 2020, government support to mitigate the financial consequences of the coronavirus crisis for the working population contributed to a positive purchasing power development in the Caribbean Netherlands. The median purchasing power rose by 4.2 percent on Bonaire, by 2.4 percent on St Eustatius and by 4.1 percent on Saba.
|* Provisional figures|
Improvement in purchasing power
Due to the emergency COVID-19 support to local companies, employee jobs were barely lost and wages not reduced in 2020. Self-employed entrepreneurs were also compensated for their income losses. In addition, a number of steps were taken as of 2019 to improve livelihood security, boosting purchasing power on all three islands. In 2020, the child benefit was raised by more than 30 percent. Both social benefits and the statutory minimum wage received a supplemental increase as well. Furthermore, in 2020, a compensation on water, electricity and internet on all three islands gave a further boost to local purchasing power.
From 2012 to 2017, the median purchasing power throughout the Caribbean Netherlands improved each year. On Bonaire and Saba, average price levels increased more rapidly than incomes in 2018, leading to purchasing power losses. There where purchasing power gains again from 2019 onwards, although on all three islands the gain was less substantial in 2020 than in the preceding year.
The median purchasing power rose for all types of households. Due to the raised child benefit, the improvement was most evident in households with underage children. Single parents on Bonaire and Saba benefited most: for them, spending power increased by 7.4 and 6.1 percent, respectively.
|Couple without child(ren)||3.5||1.8||3.2|
|Couple with child(ren)||4.0||1.0||3.2|
|Multi-person household, other||1.4||1.6||6.7|
|* Provisional figures|
More information about purchasing power development
Median purchasing power development
Purchasing power is defined as the equivalised household income adjusted for price developments which are based on the consumer price index (CPI). Purchasing power is used to determine income changes (in real terms), but may also be used to determine (developments in) differences in prosperity between individuals or households.
The development is measured as the change in median purchasing power. The median is defined as the value separating the higher half from the lower half. In simple terms, it may be thought of as the ‘middle’ value of a data set.