WILLEMSTAD - The Pisas-II Cabinet has announced that Curaçao expects to achieve another budget surplus in 2024. According to a government press release, improved tax collection and a focus on economic growth have been key factors in this success. The island also closed the last two years with positive budget results.
An analysis of the September Financial Management Report (FMR) supports the projection of a surplus but highlights the need for caution. The total anticipated surplus for 2024 is over 37 million guilders, comprising a positive balance in the ordinary budget (nearly 19 million guilders) and the capital budget (also nearly 19 million guilders).
Additional Revenue and Expenditures
The government reports that additional tax revenues have been allocated to various social projects and infrastructure improvements. For instance, 1.5 million guilders have been earmarked for housing renovations through the Ministry of Social Development, Labor, and Welfare (SOAW), while the Ministry of Justice received an additional 7.6 million guilders to cover overdue payments. In total, the budget for specific projects amounts to 109 million guilders.
However, the FMR notes that these amounts are not explicitly listed as separate items, as they appear under broader categories such as social security and capital expenditures, making direct oversight challenging.
Critical Observations
While the government remains optimistic, the FMR indicates that some projections carry risks. Tax revenues have fallen short of earlier expectations, particularly in payroll taxes and import duties. Additionally, significant expenses, such as the interest and repayments for the Curaçao Medical Center (CMC), are being absorbed by the government without corresponding direct income streams.
The debt associated with the CMC, amounting to several hundred million guilders, has been added to the national debt. The arrangement could be beneficial if financed as sovereign debt, which is cheaper than market financing. However, this increases the national debt, and approval from the Dutch government (as the financier) is required—something that remains uncertain.
The positive balances in both the ordinary and capital budgets also depend heavily on the extent to which planned expenditures are realized. Delays in infrastructure and healthcare investments due to shortages of suppliers and personnel have impacted progress.
Optimism Amid Challenges
Despite these challenges, the Pisas-II Cabinet emphasized the progress made in stabilizing Curaçao's finances. “The program has allowed us to fulfill promises to the people,” the press release stated. Whether the optimistic forecasts materialize will depend on the remaining months of 2024.
