WILLEMSTAD – The Central Bureau of Statistics (CBS) has issued a clarification on the current public debate regarding the indexation of the General Old Age Pension (AOV). The institute emphasized the importance of distinguishing between two key economic indicators it publishes: Gross Domestic Product (GDP) and the Consumer Price Index (CPI). While both are frequently mentioned, CBS stresses they serve entirely different purposes.
GDP: Measure of Economic Production
GDP reflects the total economic value of all goods and services produced in Curaçao within one year. CBS compiles the data from various sectors, following United Nations international guidelines to ensure comparability with other countries. However, the bureau notes that GDP is not an appropriate tool for indexation, since it measures overall production rather than household living costs.
“Linking AOV to GDP could result in distortions,” CBS explained. “In years of strong productivity growth but low inflation, it could create excessive burdens on the working population, while in a recession it might lead to pension cuts—something politically undesirable.”
CBS also pointed out that calculating GDP on a monthly basis is not feasible. Such a process would require businesses to submit financial information every month, creating heavy administrative burdens, response fatigue, and risks to both timeliness and accuracy of the figures.
CPI: Measure of Inflation and Cost of Living
Unlike GDP, the Consumer Price Index (CPI) is published monthly and tracks the average price development of a representative basket of goods and services purchased by households in Curaçao. Prices are collected from shops, service providers, and markets, and weighted according to household budgets.
This makes the CPI a reliable measure of inflation and purchasing power. “For indexation of wages, benefits, rent, and especially social security such as the AOV, the CPI is the correct and most transparent instrument,” CBS said.
Because the CPI directly reflects changes in the cost of living, CBS argues that a 12-month average CPI provides the fairest and most internationally recognized method for adjusting pensions, salaries, and other incomes.
Commitment to Reliable Data
The statistical office reaffirmed its independence and commitment to providing high-quality, internationally aligned data. “CBS remains dedicated to publishing accurate and timely statistics that reflect Curaçao’s socioeconomic reality, ensuring that policymakers, businesses, and citizens can base their decisions on solid evidence,” the bureau concluded.
