Central Bank: Developments in the public finances

WILLEMSTAD - During the January-June period of 2018, the government of Curaçao registered a surplus of NAf.8.0 million on its current budget, a turnaround compared to the deficit of NAf.39.7 million recorded during the first half of 2017.2 The improved fiscal position was the result of a decline in government expenditures (34.0%) that surpassed the drop-in revenues (31.4%). However, this development was to a great extent the result of a decision by the government of Curaçao to no longer include the income and expenditures of the social security bank, SVB, in the current budget. As a result of this correction, nontax revenues dropped by 83.1% while on the expenditure side, the category “transfers & subsidies” registered a decline of 58.2%.

When the income and expenditures of the SVB are also excluded in 2017, the government of Curaçao recorded a surplus of NAf.154.6 million on its current budget during the first half of 2018, up from the NAf.106.2 million surplus registered during the first half 2 Source: Financial Management Report of the government of Curaçao of June 2018. Based on advice from the government’s auditor (SOAB), the government of Curaçao decided to no longer consolidate the expenditures and income of the social security bank, SVB, in the government’s current budget. In May 2018, the government excluded all income and expenditures of the SVB over the period January – April 2018 from its current budget. In addition, as of May 2018, SVB income and expenditures are no longer included in the budget. DEVELOPMENTS IN THE PUBLIC FINANCES of 2017. This improvement was caused by an increase in government revenues (3.6%) combined with lower expenditures (-2.9%). The rise in government revenues stemmed primarily from an increase in nontax revenues reflecting a windfall in withholding tax grants related to the BRNC tax arrangement between the Netherlands and Curaçao.4 Meanwhile, tax revenues remained practically unchanged during the January – June period of 2018 compared to the first half of 2017. The decline on the expenditures side was largely the result of lower outlays on transfers & subsidies due to fewer transfers to public companies and institutions.


The outstanding public debt of Curaçao amounted to NAf.2.815 billion at the end of the first half of 2018, an increase of NAf.9.0 million compared to the end of 2017. The domestic debt component contributed to this increase, which went up by NAf.16.7 million due mainly to higher arrears towards the social security bank, SVB. Meanwhile, the foreign debt component dropped by NAf.7.7 million to NAf.2.339 billion, caused by an amortization of a sinking bond issued in January 2015 for the financing of the new hospital. Despite the rise in total debt, Curaçao’s debt-to-GDP ratio dropped slightly from 50.3% at the end of 2017 to 50.1% at the end of 2018’s first half because nominal GDP increased at a faster pace than the public debt.

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