1. Annual Report 2003 Bank van de Nederlandse Antillen Willemstad, July 5, 2004

2. Annual Report 2003 2 July 5, 2004 Developments in the real sector

3. Annual Report 2003 3 July 5, 2004 Macro-economic key figures main trading partners Further strengthening US economy. Further deterioration Dutch and Venezuelan economies.

4. Annual Report 2003 4 July 5, 2004 A regional perspective (2002)

5. Annual Report 2003 5 July 5, 2004 Economic development Netherlands Antilles Real growth GDP increased from 0.4% in 2002 to 1.4 % in 2003. Inflation increased from 0.4% in 2002 to 1.9% in 2003.

6. Annual Report 2003 6 July 5, 2004 Main developments in 2003 Continuation economic recovery:  Growth export  Higher consumption (private and government) Export growth due to:  Further growth in tourism.  Favorable performance transportation sector. Decline in private investment. Decline in activities international financial and business services sector. Increase in unemployment rate.

7. Annual Report 2003 7 July 5, 2004 Main developments in 2003 (cont.) Increase in inflation:  Increase utility prices due to higher oil prices  Appreciation euro  Higher inflation main trading partners USA and Venezuela

8. Annual Report 2003 8 July 5, 2004 Labor market of the Netherlands Antilles Increase in unemployment rate because labor force grew stronger than employment. Increase in labor force due to higher migration to the islands and legalization illegal aliens.

9. Annual Report 2003 9 July 5, 2004 Public sector developments

10. Annual Report 2003 10 July 5, 2004 Budgetary development General Government (Cash basis; NAf mln) Higher expenditures due to goods & services, interest payments and capital transfers. Higher revenues due to transfer dividend tax by Dutch government and dividends government-owned companies.

11. Annual Report 2003 11 July 5, 2004 Overview cash operations General Government (Cash basis; NAf mln.) Cash deficit first quarter 2004 amounts to NAf 51 million.

12. Annual Report 2003 12 July 5, 2004 Composition of revenues General Government Share taxes on goods & services almost doubled due to introduction sales tax.

13. Annual Report 2003 13 July 5, 2004 Composition of expenditures General Government Decline share personnel costs due to lay-offs Increase share interest payments due to rising debt

14. Annual Report 2003 14 July 5, 2004 Budgetary development Central government (Cash basis; NAf mln.) Higher expenditures due to goods & services, transfers to other levels of government and capital transfers. Higher revenues due to transfer dividend tax by Dutch government.

15. Annual Report 2003 15 July 5, 2004 Budgetary development Curacao (NAf mln.) Higher revenues due mainly to share in transfer dividend tax by Dutch government and dividend government-owned companies. Higher expenditures due mainly to goods & services and personnel costs (pension premiums).

16. Annual Report 2003 16 July 5, 2004 Development in total public debt (NAf mln.) Total debt 4.4 billion 90% of GDP

17. Annual Report 2003 17 July 5, 2004 Development in total public debt (cont.) (NAf mln.) Share domestic component of 82% in 2003.

18. Annual Report 2003 18 July 5, 2004 Development in interest payments (NAf mln.) Interest payments amounted to NAf 252 million in 2003 (24% of tax revenues and 17% of expenditures).

19. Annual Report 2003 19 July 5, 2004 Net borrowing of the governments Net borrowing up to June 30, 2004: NAf 197 million Central government NAf 113 million Curacao NAf 84 million Note: 2003 central government excluding debt conversion SVB (NAf. 342 million)

20. Annual Report 2003 20 July 5, 2004 Government bonds maturity schedule As per June 30, 2004 Average annual maturity 2004-2011: NAf 221 million Central government NAf 142 million Curacao NAf 79 million

21. Annual Report 2003 21 July 5, 2004 The external sector

22. Annual Report 2003 22 July 5, 2004 Balance of payments Transaction basis (NAf mln.) Balance of payments surplus of NAf 35 million in 2004-I.

23. Annual Report 2003 23 July 5, 2004 Current account balance (NAf mln.) Small surplus in 2003 due mainly to higher earnings from bunker sales and tourism.

24. Annual Report 2003 24 July 5, 2004 Foreign exchange revenues from services (NAf mln.)

25. Annual Report 2003 25 July 5, 2004 Tourism revenues by island Cash basis (NAf mln.) Shares in 2003: St. Maarten 62% Curacao 34% Bonaire 4%

26. Annual Report 2003 26 July 5, 2004 Foreign exchange contribution international financial and business services sector (NAf mln.) Higher profit tax in 2003 due to transfer of dividend tax by the Netherlands (NAf. 54 million).

27. Annual Report 2003 27 July 5, 2004 2003 Composition current foreign exchange revenues

28. Annual Report 2003 28 July 5, 2004 Development in international reserves (1) Import coverage on June 25, 2004: 2.7 months.

29. Annual Report 2003 29 July 5, 2004 Monetary developments

30. Annual Report 2003 30 July 5, 2004 Development in the money supply (NAf mln.) Money supply increased by 8% in 2003 (NDA 8% and NFA 9%)

31. Annual Report 2003 31 July 5, 2004 Changes in domestic demand for money by sector (NAf mln.) Monetary expansion by the government and the private sector slowed in 2003.

32. Annual Report 2003 32 July 5, 2004 Development in credit extension Leeward Islands 0% 5% -2% 4% 9% 3% Total

33. Annual Report 2003 33 July 5, 2004 Development in credit extension Windward Islands 9% 3% 2% 16% 9% -1% Total

34. Annual Report 2003 34 July 5, 2004 Development in domestic interest rates Commercial bank rates continued to decline. Government bond yield started to increase again.

35. Annual Report 2003 35 July 5, 2004 The financial sector

36. Annual Report 2003 36 July 5, 2004 Macro-prudential indicators

37. Annual Report 2003 37 July 5, 2004 Balance sheet development domestic banks (NAf mln.)  Assets increased by 4.8% in 2003: Increase in lending. Increase in cash holdings.  Increase in assets funded primarily by savings and time deposits.  Capitalization remained adequate.

38. Annual Report 2003 38 July 5, 2004 P & L development domestic banks (NAf mln.)  Higher operational income in 2003 due to “other income.”  Slight decline in expenditures.  Net operating income before taxes improved to NAf 95.3 million.

39. Annual Report 2003 39 July 5, 2004 Balance sheet development international banks (NAf bln.)  Assets decreased by 5.4% in 2003 due to decline in loans.  Borrowings comprised 55% of total funding.  Capitalization above international standard of 8%.

40. Annual Report 2003 40 July 5, 2004 Institutional investors

41. Annual Report 2003 41 July 5, 2004 Solvency insurance sector (NAf mln.)

42. Annual Report 2003 42 July 5, 2004 Balance sheet domestic life insurance sector (NAf mln.)  Total assets increased by 8.3% in 2002.  74% of total assets comprises investments.  Equity position three and a half times more than required.

43. Annual Report 2003 43 July 5, 2004 Balance sheet domestic nonlife insurance sector (NAf mln.)  Total assets increased by 75.6% in 2002 reaching pre-1999 levels.  47% of total assets was invested.  Capitalization increased and remained well above the required solvency margin.

44. Annual Report 2003 44 July 5, 2004 Net income domestic insurance companies Before taxes (NAf mln.)  Net result life insurance industry declined to NAf 14.0 million (14.1%) in 2002 due mainly to higher net benefits paid.  Net result nonlife insurance industry back to normal levels; 2001 was exceptional due to: low net claims incurred high underwriting profit high net investment income

45. Annual Report 2003 45 July 5, 2004 The End