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).
KINGDOM OF THE NETHERLANDS—CURAÇAO AND SINT MAARTEN