WILLEMSTAD - Curaçao has received positive news after a challenging period of economic decline. The International Monetary Fund (IMF) has confirmed that the island's economy is on the path to recovery, thanks to robust growth in the tourism sector and significant investments in the private sector.
However, the IMF stresses the need for a strong development strategy supported by all stakeholders to fully capitalize on Curaçao's economic potential.
A noteworthy stride has recently been made with the introduction of a long-term debt policy and investment strategy. This will aid in the formulation of a medium-term tax policy, as suggested by the IMF.
Economy
The IMF reports a 4.2 percent growth in Curaçao's economy in 2021, with an estimated growth of 6.5 percent in 2022. Moderate growth of approximately three percent is anticipated for both 2023 and 2024.
Encouragingly, inflation is projected to decrease from 3.7 percent in 2023 to an average of two percent in the medium term.
Significant progress has been made in the realm of public finances over the past two years. The budget surplus of nearly half a percent of Gross Domestic Product (GDP) in 2022 demonstrates substantial improvement compared to the 1.6 percent deficit recorded in 2019. The Curaçao Ministry of Finance attributes this improvement to enhanced tax administration and more efficient collection of outstanding taxes.
To further bolster economic growth, it is imperative to invest in high-quality expenditures that stimulate growth. The IMF underscores the importance of continued improvement in tax administration, complemented by tax policy reform.
Comprehensive modernization of the government apparatus is also crucial to enhance the efficiency and quality of public services.
Furthermore, a comprehensive overhaul of the healthcare sector is indispensable to ensure the continuity of healthcare services, restore financial viability, and mitigate financial risks.