Cft: “Use economic recovery to strengthen Curaçao’s economy in a sustainable way”

Willemstad:--- With the recovery of tourism, the economy is also picking back up. Curaçao needs to utilize this period of recovery to structurally reform and sustainably strengthen the economy. The Board of financial supervision of Curaçao and Sint Maarten (Cft) has insisted on this matter in their recent talks with the government of Curaçao. Although the economy is recovering, the challenges for Curaçao remain substantial. Curaçao has to turn the deficit on the regular service into a surplus, bring the national debt to an acceptable level and implement reforms in order to safeguard the social security system for future generations.

According to the Central Bank of Curaçao and Sint Maarten, the year 2021 ended with real growth of 1.7 percent. For this year the real economic growth is estimated at 6.6%. However, years of economic decline and increasing public debt have significantly deteriorated the public finances. Curaçao's national debt now amounts to ANG 4.3 billion. Curaçao is facing a significant challenge to reduce its national debt and to bring it to a sustainable level as quickly as possible. A combination of reforms from the National Package (Landspakket), targeted investments, and a strict fiscal policy, by means of structurally lowering the public sector’s expenditures and health care, should ensure more economic growth and a decrease of the national debt.

2022 Budget and upcoming years

The adopted budget for 2022 shows a deficit of ANG 162 million on the regular service. Cft has emphasized the great importance of achieving a balanced budget in 2023 and a surplus in later years so that a start can be made on paying off the national debt. For example, a loan of ANG 140 million still proceeding from the debt restructuring in 2010 must be repaid in 2025. On a positive note, Curaçao has been successful in collecting back taxes in the past six months. Also in 2022, in addition to a further increase in tax compliance, the announced restructuring of the tax authorities should result in structurally higher tax revenues.