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Business and Economics > Public Finance

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Cover IMF Staff Country Reports
Kingdom of the Netherlands-Curaçao and Sint Maarten: 2024 Article IV Consultation Discussions-Press Release and Staff Report
International Monetary Fund. Western Hemisphere Dept.
The 2024 Article IV Consultation presents that Curaçao and Sint Maarten have continued to experience a vigorous post-pandemic recovery underpinned by strong stayover tourism, which is outperforming Caribbean peers. Headline inflation has declined rapidly led by international oil price developments, notwithstanding a recent uptick, while core inflation remains elevated. In both countries, current account deficits improved markedly from pandemic years but remain high. Fiscal positions remained strong and in compliance with the fiscal rule. Growth is expected to accelerate in 2024 before gradually converging to its potential over the medium term. Stayover tourism supported by fiscal expansion is projected to drive economic growth at a robust 4.5 percent in 2024 due to new airlifts and further expansion in hotel capacity. Both countries need more public investments and strategies to improve tourist experience and enhance tourism’s value added, including adequate infrastructure to allow for timely ground transportation and continued efforts to improve the quality of services provided.
Keywords:
Sint Maarten team; en Sint Maarten; Curaçao team; IMF staff estimate; Curaçao mission; IT investment; Tourism; Labor markets; Caribbean; Global
Cover IMF Staff Country Reports
Kingdom of the Netherlands-Curaçao and Sint Maarten: 2023 Article IV Consultation Discussions-Press Release; and Staff Report
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.
Keywords:
Curaçao team; en Sint Maarten; Sint Maarten team; Curaçao health sector; Sint Maarten monetary union; government operation; Public investment spending; Caribbean; Global
Cover IMF Staff Country Reports
Kingdom of the Netherlands-Curaçao and Sint Maarten: 2022 Article IV Consultation Discussions-Press Release; and Staff Report
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.
Keywords:
Sint Maarten monetary union; Curaçao team; Sint Maarten team; Sint Maarten well; en Sint Maarten; COVID-19; Public investment spending; Caribbean; Global
Cover IMF Staff Country Reports
Kingdom of the Netherlands—Curaçao and Sint Maarten: 2021 Article IV Consultation Discussions; Press Release and Staff Report
International Monetary Fund. Western Hemisphere Dept.
The COVID-19 pandemic inflicted another major shock on the economies of Curaçao and Sint Maarten, which followed category 5 hurricanes in Sint Maarten in 2017 and the spillovers of the Venezuelan crisis on Curaçao. Despite the substantial response measures financed by The Netherlands, the economic contraction in 2020 was severe.
Keywords:
article IV consultation discussion; government operation; Curaçao customs; current price; Policy recommendation; Fiscal stance; COVID-19; Caribbean
Cover IMF Staff Country Reports
Kingdom of the Netherlands-Curacao and Sint Maarten: 2019 Article IV Consultation-Press Release and Staff Report; and Statement by the Executive Director for the Kingdom of the Netherlands-Curacao and Sint Maarten
International Monetary Fund. Western Hemisphere Dept.
This 2019 Article IV Consultation focuses on Curaçao and Sint Maarten’s near and medium-term challenges and policy priorities and was prepared before coronavirus disease 2019 became a global pandemic and resulted in unprecedented strains in global trade, commodity and financial markets. The fiscal position in Curaçao improved in the past two years, in part due to implemented fiscal measures. Both Curaçao and Sint Maarten would benefit from introducing a Fiscal Responsibility Framework. It could incorporate a central government debt ratio as a long-term anchor and operational rules calibrated to meet it. The report suggests that risks in the financial sector need to be addressed as a matter of priority. The authorities should develop a strategy for addressing financial sector vulnerabilities with the objective of preserving financial stability while minimizing fiscal costs. Significant strengthening of supervision and a complete overhaul of the bank resolution framework are also urgently needed. An across-the board improvement in the governance framework should be a key priority in both countries. Vulnerabilities in the financial system point to the need to strengthen governance in the financial sector.
Keywords:
ISCR; CR; Sint Maarten authorities; IMF staff estimate; en Sint Maarten; Curaçao payroll process; article IV consultation discussion; economy of Sint Maarten; Sint Maarten authority; trust fund; labor market; recovery in Sint Maarten; financial system; current account; CAD in Curaçao; consultation discussion; liability positions vis-à-vis nonresident; capital expenditure; union GDP; Fiscal stance; Tourism; Caribbean; Global; Extra-budgetary funds
Cover IMF Staff Country Reports
Kingdom of the Netherlands—Curaçao and Sint Maarten: 2018 Article IV Consultation-Press Release and Staff Report
International Monetary Fund. Western Hemisphere Dept.
Weak growth and underlying structural vulnerabilities persist in both Curaçao and Sint Maarten. Worsened macroeconomic conditions—reflecting the spillovers from one of Curaçao’s largest trading partners and the devastation from Hurricanes Irma and Maria in Sint Maarten—make the need for policy adjustment and structural reforms aimed at ensuring fiscal sustainability, enhancing competitiveness, strengthening investor confidence, and developing capacity more urgent.
Keywords:
ISCR; CR; discussion; real GDP; government; IMF staff estimate; liability positions vis-à-vis nonresident; growth in Curaçao; positions of Curaçao; finance of Curaçao; Budget planning and preparation; Fiscal space; Caribbean; Global
Cover IMF Staff Country Reports
Kingdom of the Netherlands—Curaçao and Sint Maarten: 2016 Article IV Consultation Discussions-Press Release; Staff Report; and Informational Annex
International Monetary Fund. Western Hemisphere Dept.
This 2016 Article IV Consultation highlights that the fiscal situation in Curaçao and Sint Maarten remains relatively stable, following the debt relief in 2010, but progress on necessary fiscal and structural reforms has been slow. Curaçao experienced modest growth in 2015 of 0.1 percent, reflecting a turnaround from the contraction of 1.1 percent in 2014. The economy of Sint Maarten expanded by 0.5 percent in 2015, a slowdown compared with the 1.5 percent recorded in 2014. Real GDP growth in 2016 is expected to reach 0.5 percent in Curaçao and 0.7 percent in Sint Maarten. Over the medium term, growth is expected to pick up moderately to 0.9 percent and 1.3 percent for Curaçao and Sint Maarten, respectively.
Keywords:
ISCR; CR; growth prospects; article IV consultation discussion; CPI data; labor market; IMF staff estimate; liability positions vis-à-vis nonresident; exchange regime; Fiscal stance; Caribbean
Cover IMF Staff Country Reports
Kingdom of the Netherlands—Curaçao and Sint Maarten: 2014 Article IV Consultation-Staff Report; and Press Release
International Monetary Fund. European Dept.
KEY ISSUES Context: The union’s current account deficit—the key economic vulnerability flagged in the previous (2011) consultation—has declined over the past few years, including thanks to fiscal adjustment in Curaçao. But it remains large. Curaçao’s growth and job creation remain lackluster, due to weak competitiveness, adverse sectoral trends (e.g., in the international financial center), red tape, and rigid labor laws. Sint Maarten’s tourism-based economy is recovering but remains vulnerable to shocks and suffers from weak administrative capacity—as underscored, for example, by weakening tax collection. Risks: Both Curaçao and, especially, Sint Maarten are exposed to shifts in tourism demand. Curaçao is vulnerable to the uncertain situation in Venezuela, its main trading partner. If long-discussed flexibility- and competitiveness-enhancing structural reforms are not implemented, both countries’ capacity to absorb shocks may prove limited, and pressures on FX reserves and, ultimately, the peg may intensify. Policy recommendations: Fiscal policies should entrench recent gains to facilitate continued external adjustment (especially in Curaçao) and build buffers against shocks. Curaçao should extend the reform of its pension system to public sector workers, further streamline its administrative apparatus, and address weak governance and finances in state companies. Sint Maarten needs to increase revenues to support an expanding administration, including through stronger tax collection and greater contribution from its profitable state companies. The common central bank must monitor closely the deterioration in banks’ loan portfolios and refrain from direct financing of non-financial companies. It should also use more standard sterilization tools to control banks’ excess liquidity. Urgent action is required to lower the cost of doing business and remove pervasive disincentives to both supply and demand of labor.
Keywords:
ISCR; CR; center; aggregate consumer price index; debt ratio; real GDP; island government; liability positions vis-à-vis nonresident; finance minister; Minister of tourism; Fiscal stance; Public debt sustainability analysis; Global; Caribbean; Europe
Cover IMF Staff Country Reports
Kingdom of the Netherlands: Curaçao and Saint Maarten: 2011 Article IV Consultation: Staff Report; Informational Annex; and Public Information Notice on the Executive Board Discussion
International Monetary Fund
The two newly autonomous countries within the Kingdom of the Netherlands face substantial challenges. Growth has been low, and unemployment high. The current account deficit has widened to worrisome levels, increasing the vulnerability of the peg to the U.S. dollar and stimulating calls for dollarizing or dissolving the currency union. A substantial adjustment is needed to bring the underlying current account deficit to historically sustainable levels over the medium term. This could be facilitated by measures to restrain credit growth, supported by fiscal consolidation.
Keywords:
ISCR; CR; consumer price index; deficit; expenditure; total consumer price index; liability positions vis-à-vis nonresident; Netherlands Antillies debt; exchange rate; deficit outcome; central bank; Current account deficits; Debt relief; Exports; Caribbean; Global
Cover IMF Staff Country Reports
Kingdom of the Netherlands: Aruba: Detailed Assessment of Compliance with the Basel Core Principles for Effective Banking Supervision
International Monetary Fund
This paper discusses detailed assessment of compliance with the Basel Core Principles for effective banking supervision for the Kingdom of the Netherlands—Aruba. Aruba’s offshore banking sector is small by international standards, with only two institutions registered. The mission also recommends that the Central Bank of Aruba (CBA) meet with management to better understand their plans for their Aruban operations and their financial results. Aruba remains open to foreign investment and migrant workers, who make up 40 percent of the population and have been key contributors to economic growth.
Keywords:
ISCR; CR; risk management; credit institution; CBA authority; CBA examiner; CBA's assertion; supervision department; credit risk; country risk; Credit; Market risk; Credit risk; External audit; Loans; Caribbean