Kingdom of the Netherlands-Curaçao and Sint Maarten: Staff Concluding Statement 2018 Article IV Mission

A Concluding Statement describes the preliminary findings of IMF staf at the end of an official staff visit (or ‘mission’), in most cases to a member country. Missions are undertaken as part of regular (usually annual) consultations under Article IV of the IMF’s Articles Agreement, in the context of staff monitored programs, or as part of other staff monitoring of economic developments.

Weak growth and underlying structural vulnerabilities persist in both Curaçao and Sint Maarten, magnified further by large negative external shocks, including spillovers from one of Curaçao’s largest trading partners and the impact of Hurricanes Irma and Maria on Sint Maarten. The fiscal and external positions of both countries deteriorated, and significant uncertainty is impacting economic activity adversely. The challenging outlook makes the need for structural measures aimed at ensuring fiscal sustainability, enhancing competitiveness, strengthening investor confidence, and developing capacity more time-critical. The authorities recognize the need to act decisively to put both economies on the path of higher and sustainable growth.

Recent Economic Developments

  • In Curaçao, real GDP contracted by about 13/4 percent in 2017, marking five years of recession in the past seven years.
  • Curaçao’s fiscal position worsened significantly.
  • In Sint Maarten, real GDP is estimated to have contracted by about 4 3/4 percent in 2017 following Hurricane Irma, which caused about US$2.7 billion in damages and losses.
  • The large drop in tourism-related revenues and increase in expenditure significantly worsened Sint Maarten’s 2017 fiscal accounts.
  • The external situation of the union has deteriorated since 2015 and remains weak.

Outlook and Risks

  • After further contraction in 2018, Curaçao’s growth is expected to remain subdued over the medium term.
  • Sint Maarten’s real GDP is projected to contract by 8 1/2 percent in 2018.
  • The union’s current account deficit will gradually narrow over the medium term but remain higher than those of regional peers.
  • Risks to the outlook are mainly on the downside.

Total pages 7 • Language English 

Source: International Monetary Fund (IMF)

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