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International Monetary Fund. Western Hemisphere Dept.
The 2023 Article IV Consultation with Kingdom of The Netherlands—Curaçao and Sint Maarten continue to recover from major shocks. Both countries have had two years of robust growth driven by a strong rebound of tourism, although the benefits of recovery have not reached all sectors. The recovery in tourist arrivals was among the fastest in the Caribbean and the current outcomes are above the pre-pandemic levels. Sint Maarten has further to go to reach levels seen before hurricane Irma in 2017. Similar to other countries, Curaçao experienced a strong bout of inflation, which affected the vulnerable. The international reserves of the monetary union of Curaçao and Sint Maarten remain at a comfortable level despite the elevated external current account deficit, which was due in part to higher import prices. The banking system remains well capitalized and liquid. After a robust recovery in 2022, estimated at 7.9 percent, output growth is expected to moderate. With post-pandemic recovery growth largely accomplished, activity is expected to encounter harder supply constraints going forward, including hotel room inventory and airport reconstruction. The authorities in both countries should implement broad-based structural reforms to support a robust and inclusive recovery, improve resilience to climate change, limit fiscal risks, and safeguard debt sustainability.
International Monetary Fund. Western Hemisphere Dept.

1. Curaçao is recovering from multiple major shocks. The pandemic caused an unprecedented drop in real GDP of 18 percent in 2020, more than the Caribbean average of 14/ percent (Figure 1), which came on top of the protracted pre-pandemic recession caused by spillovers from the Venezuela crisis and the loss of oil refining activity. Comprehensive economic support measures put in place by the authorities and financed by The Netherlands were instrumental in protecting lives and livelihoods and limiting the economic fallout. Curaçao’s economy started to recover in 2021 and its growth strengthened in 2022, although GDP is still below its 2019 level. A sharp increase in inflation in 2021-22 reduced real incomes and especially affected the vulnerable. In April 2022, the authorities of Curaçao, Sint Maarten, and Aruba signed a mutual agreement with The Netherlands on the arrangements for implementing the landspakket, a structural reform package designed to strengthen government finances, increase financial sector resilience, and improve the overall economic environment. The authorities have made progress on implementing the IMF’s advice, albeit at a slow pace (Annex III).

Brian Kwok Chung Yee and Ms. Bidisha Das
This paper discusses the high-level summary technical assistance report for Curaçao and Sint Maarten on financial soundness indicators (FSI). The High-Level Summary Technical Assistance Report series provides high-level summaries of the assistance provided to IMF capacity development recipients, describing the high-level objectives, findings, and recommendations. The mission, in collaboration with the staff of the Centrale Bank van Curaçao en Sint Maarten (CBCS), successfully developed bridge tables to compile FSIs for commercial banks and savings banks, which could be linked in the long term with its database to automate the FSIs compilation process. The mission also identified a few areas for improvements related to the data collection framework for the deposit takers to be implemented in the medium term. As a result of the mission, the CBCS is able to start reporting the FSI-standard reports, financial soundness metadata, and financial soundness institutional coverage for dissemination on the IMF’s FSI website for Curaçao and Sint Maarten. A timeframe for implementing the mission recommendations including reporting FSIs to statistics department was also discussed and agreed on with the CBCS staff.
International Monetary Fund. Western Hemisphere Dept.

IMF Country Report No. 22/270

International Monetary Fund. Western Hemisphere Dept.
The economies of Curaçao and Sint Maarten are recovering from the pandemic but facing multiple challenges, including spillovers from the war in Ukraine. Curaçao was in a protracted recession even before the pandemic due to spillovers from the Venezuelan crisis. Sint Maarten needs to fully recover not only from the pandemic, but also from the devastating 2017 hurricanes.
International Monetary Fund. Western Hemisphere Dept.

1. Since gaining its autonomy in 2010, Curaçao suffered multiple economic shocks. The economy shrank by 28 percent in the past decade due in part to spillovers from Venezuela and the pandemic (Figure 1). Population and employment have been continuously declining since 2016 and unemployment remains elevated. The closure of the refinery poses questions about new sources of growth. Curaçao faces pervasive structural challenges including governance vulnerabilities. The pandemic constrained the implementation of staff advice (Annex I). The agreement with The Netherlands to implement structural reforms creates a window of opportunity to address these challenges and improve resilience (Annex II). The war in Ukraine led to higher inflation that disproportionally affected the vulnerable and put a drag on the recovery.