WILLEMSTAD – Curaçao’s strong economic growth is increasingly being accompanied by growing financial vulnerabilities, according to the new Financial Stability Report 2026 published by the Centrale Bank van Curaçao en Sint Maarten (CBCS).
The Central Bank warns that rapid credit expansion, especially in commercial lending and real estate financing, is now outpacing economic growth and could create risks for the financial system if the trend continues.
According to the report, total private sector credit in the monetary union grew by 10.9 percent in 2025, while nominal economic growth stood at 5.7 percent. That imbalance pushed the so-called “credit-to-GDP gap” into positive territory for the first time after several years, signaling what the CBCS describes as the beginning of a more expansionary financial cycle.
The report specifically identifies credit risk as “the main domestic vulnerability” facing the financial sector.
The banking sector saw strong growth in both household and commercial lending during 2025, but the expansion was especially concentrated in business financing and real estate investments. Commercial loans in Curaçao rose to 43.8 percent of GDP, while banks also reported strong increases in commercial mortgages and non-resident property financing.
At the same time, the CBCS notes that nonperforming loans are beginning to rise again after several years of improvement. The ratio of bad loans increased to 4.9 percent in 2025, while early-stage payment delinquencies also increased.
Particularly concerning for the Central Bank is that banks’ provisioning buffers are weakening. The report states that the sector’s coverage ratio for bad loans fell below the IMF benchmark of 50 percent, meaning banks may become more exposed if economic conditions worsen.
The CBCS also warns that Curaçao’s growing dependence on tourism and real estate amplifies these risks. A slowdown in tourism, weakening foreign investment, or a correction in the property market could directly affect borrowers’ repayment capacity and place additional pressure on banks.
Despite the concerns, the Central Bank emphasizes that the financial system remains stable overall, with banks maintaining strong capital and liquidity buffers. However, the report stresses that continued monitoring and stronger macroprudential oversight will be necessary to prevent vulnerabilities from building further.