Global growth remained modest in the September quarter of 2016 reflecting a faster pace of expansion in the advanced economies, moderated by weakened activities in the emerging and developing economies. Amidst these international developments, the economic performance in the monetary union was disappointing with growth remaining flat (0.0%) in Curaçao, while Sint Maarten posted a real GDP contraction of -0.3%.
The flat economic growth in Curaçao was accompanied by a negative inflation rate of -0.6%. The third-quarter deflation was caused by a decline in international fuel prices, moderated by an increase in domestic food prices. Meanwhile, the annualized inflation rate dropped slightly to -0.5% at the end of September 2016 compared to -0.4% at the end of June 2016.
The 2016 third-quarter stagnation in Curaçao reflected an increase in domestic demand that was offset by a fall in net foreign demand. Domestic demand was up, driven by increases in private and public investment and in private consumption.
By contrast, public consumption dropped, reflecting lower outlays on both wages & salaries and goods & services. Net foreign demand contracted as the decline in exports surpassed the lower imports.