IMF Projects Moderate Growth for Curaçao and Sint Maarten Amid Tourism Strength and Global Uncertainty
The Executive Board of the International Monetary Fund (IMF) has concluded its Article IV Consultation discussions with the Kingdom of the Netherlands — covering Curaçao and Sint Maarten — and endorsed the staff appraisal on a lapse-of-time basis. The authorities have consented to the publication of the Staff Report.
The Fund noted that both economies continue to benefit from the post-pandemic tourism boom, with strong expansions in stayover arrivals and construction activity. While disinflation broadly persisted through 2024, the current account deficit of the monetary union remained elevated as rising tourism receipts were offset by construction-related imports. Fiscal positions in both territories remained robust and compliant with the fiscal rule, although progress on the landspakket reform programme has slowed, with notable advancements only in digitalisation of permits.
Curaçao Outlook
Economic growth in Curaçao is expected to moderate to 4% in 2025, balancing domestic demand with global headwinds. Expansion in tourism and construction, coupled with higher public investments, will sustain growth. Over the medium term, however, growth is projected to ease to 2% as the tourism sector reaches saturation and global demand slows. Inflation is forecast at 2.5% in 2025 before converging to 2% in the medium term. The primary fiscal balance is expected to remain in surplus, while the current account deficit, though narrowing, will stay elevated.
Sint Maarten Outlook
Sint Maarten’s economy is projected to expand by 3% in 2025, driven by increased hotel capacity and tourism inflows. Growth is seen converging to 2% in the medium term as the island approaches its tourism carrying capacity. Inflation is expected at 3.3% in 2025, tapering towards 2% over the medium term. While fiscal balances may deteriorate temporarily due to stronger investment spending, the current account is projected to shift into a small surplus over time.
Risks and Policy Outlook
The IMF cautioned that risks remain tilted to the downside, including potential global trade and investment shocks and a sharper-than-expected slowdown in external demand, which could weigh on tourism revenues and raise import costs. On the upside, faster execution of infrastructure projects could bolster growth.
Monetary policy remains appropriately geared toward preserving the currency peg, with the Fund assessing the financial sector as broadly sound, well-capitalised, and liquid.
