WILLEMSTAD – Curaçao’s widespread household debt problems can no longer be regarded solely as a social issue and could have direct consequences for economic growth, government revenue and public spending, according to the Advisory Council (Raad van Advies).
The warning is contained in the Council’s advice on Curaçao’s proposed 2027 budget and follows the first results of the Central Bureau of Statistics’ Enkuesta Sosial 2025.
According to those findings, more than 60 percent of family households experience difficulties meeting their debt obligations. The Advisory Council considers the scale of the problem significant enough to potentially affect the country’s overall financial stability.
One of the most immediate economic consequences could be weaker household consumption. When families must devote a substantial share of their income to servicing debts, less money remains available for purchases of goods and services. Reduced consumption could slow economic activity and, in turn, affect government revenue from turnover tax and other taxes.
At the same time, the government could face higher expenditures. The Council points to the possibility of increased demand for social assistance and debt-relief services as more households experience serious financial difficulties.
The effects could also extend into healthcare. Prolonged financial problems can create psychosocial pressure, potentially increasing demand for healthcare and other forms of social support.
Housing is another concern. According to the Advisory Council, households that become unable to meet their financial obligations could eventually lose their homes, increasing pressure on Curaçao’s already important social housing needs.
The Council also identifies potential consequences for labor participation, social cohesion and public safety. Prolonged financial hardship on such a broad scale could contribute to social tensions and, according to the advice, potentially increase crime.
For that reason, the Advisory Council asked the government to explain in the 2027 budget what consequences it expects from the household debt situation and how these risks will be addressed.
The warning comes despite a formally balanced 2027 budget. The Council argues that assessing the sustainability of Curaçao’s public finances requires looking beyond whether projected revenue and expenditure balance on paper and considering underlying social and economic risks that could eventually create additional costs for the government.