WILLEMSTAD – Curaçao's aging population threatens to increase pension and healthcare expenditure and could eventually leave the government with fewer resources for other priorities unless structural reforms are implemented, the Centrale Bank van Curaçao en Sint Maarten (CBCS) warns.
The Central Bank identifies demographic change as one of Curaçao's significant long-term domestic economic risks.
As the population ages and the proportion of elderly residents increases, the number of pension beneficiaries is expected to rise.
At the same time, demand for healthcare is expected to increase, particularly for chronic illnesses and age-related care.
The combination will place additional pressure on public finances.
The CBCS also warns that inflation can make the problem more difficult for older residents.
Higher prices reduce the purchasing power of pensioners and other households living on fixed incomes, increasing financial pressure on groups already vulnerable to increases in the cost of living.
Without structural reforms, according to the Central Bank, these demographic developments could weaken fiscal sustainability and reduce the resources available for other government priorities.
The warning comes amid an ongoing political discussion in Curaçao over the level and financing of the General Old Age Pension, or AOV.
The CBCS report does not prescribe a specific level for pension benefits. Its warning instead focuses on the broader structural challenge: more elderly residents mean more beneficiaries and greater healthcare demand, both of which have to be financed over the long term.
That makes the aging population not only a social issue but increasingly a question of fiscal policy.
Any lasting improvement in benefits for elderly residents will therefore have to be considered alongside the long-term ability of Curaçao's pension and healthcare systems to finance a growing elderly population.