Curaçao’s Economic Growth Stronger Than Expected
Curaçao’s economy is experiencing a robust recovery, with growth projections for 2024 now revised upwards by the Central Bank of Curaçao and Sint Maarten (CBCS) to 5.4%, higher than initially forecasted. This follows a solid expansion of 4.2% in 2023, driven by the booming tourism sector and significant construction investments in areas such as real estate, utilities, and ship repair. As tourism continues to perform better than expected and private investments increase, the country is positioned for steady growth. However, growth is projected to slow to 3.2% in 2025, signaling the need for sustained structural reforms to maintain momentum.
GDP Growth
Fiscal Outlook: Managing Surpluses
Curaçao’s fiscal conditions have improved, with the government posting a current budget surplus of 2.5% of GDP in 2023, up from 1.4% in 2022, which is projected to remain positive at 2.2% in 2024 and to further increase to 3.5% by 2025. According to the CBCS, this improvement is driven by increased tax revenues from higher economic activity, including sales, wage, and profit taxes, as well as ongoing efforts to enhance tax compliance. However, government expenditures are also rising, particularly in areas like civil servant salaries and interest payments on COVID-19 liquidity loans. While the surplus remains positive, careful fiscal management will be needed to sustain these gains in the coming years.
Current Budget Balance % GDP
Debt to GDP
The Importance of Reforms
Executing structural reforms outlined in the Mutual Agreement with the Netherlands is crucial for Curaçao’s long-term economic health. Although progress has been made, the pace of reform implementation has been slower than desired. Moreover, the execution of multi-annual public investment programs has lagged, limiting the island's ability to fully capitalize on its growth potential. A dedicated focus on these reforms, alongside public investments, will be essential to boosting economic resilience and fostering sustainable growth.
How We Can Help
At Res Publica we offer the expertise needed to help navigate these challenges and seize emerging opportunities. With our Project Management services, we can assist government agencies in executing critical reforms and implementing investment programs that ensure fiscal stability and promote long-term growth.
