Second Analysis of the 2027 Budget. The first analysis was published on August 24.
A budget surplus of XCG 84.8 million sounds impressive. And it is. Curaçao is projecting a surplus on the ordinary budget for 2027, as well as an overall positive budget balance of XCG 32 million. This represents a clear improvement compared with the original draft budget.
That improvement deserves recognition. But it should not be the end of the discussion.
The most important question is not simply whether the budget balances, but whether it makes Curaçao structurally stronger financially.
My conclusion is that Curaçao’s financial position is improving, but long-term fiscal sustainability has not yet been secured.
More Revenue, but Also More Spending
Budget revenues are expected to increase by approximately XCG 200 million in 2027. A significant part of this increase comes from higher tax revenues, including approximately XCG 38 million in additional profit tax revenue and around XCG 82 million from the proposed Tourist Entry Tax.
It is positive that the government has taken into account the possibility of a delay in introducing the Tourist Entry Tax. The full potential revenue has not been treated as guaranteed, while buffers and possible expenditure-side measures have been included.
That is prudent.
However, structurally sound budgeting requires more than projecting higher revenues. The crucial question is how much of that additional revenue is structural, realistic and actually collectible.
At the same time, expenditures are rising sharply. Total spending is expected to increase by approximately XCG 154 million, or 8 percent, compared with the approved 2026 budget. Personnel expenses rise to approximately XCG 564 million, while spending on goods and services increases from XCG 310 million to XCG 352 million, an increase of 14 percent.
This creates an important tension.
Curaçao is gaining more financial room, but a substantial part of that additional room is simultaneously being absorbed by higher expenditure.
Every structural increase in government spending should therefore be accompanied by a simple question: What does society receive in return?
Spending more is not an achievement in itself. Creating greater public value with public money is.
Investing Is Necessary. Borrowing Requires Discipline.
Curaçao needs to invest in infrastructure, digitalization, modernization of the tax system and human capital. The 2027 Budget therefore includes investments that can be justified on substantive grounds, including approximately XCG 67 million for physical and digital infrastructure and XCG 17 million for tax modernization and compliance.
It is also positive that the government has reduced the amount of new borrowing for investments from XCG 190 million to XCG 130 million.
That is a clear improvement.
Debt management, however, remains a fundamental challenge. Curaçao wants to reduce its debt-to-GDP ratio from approximately 61 percent to 55 percent within three to five years and is working on an integrated debt strategy. At the same time, a XCG 370 million loan will have to be refinanced in 2030.
Total gross debt repayments are expected to exceed XCG 500 million in 2030, of which XCG 370 million relates to the maturing loan.
The relevant question, therefore, is not only whether Curaçao can borrow responsibly today.
The more important question is: How much financial room will remain tomorrow after these debts have to be repaid?
Looking Only at 2027 Misses the Real Challenge
Those who look only at 2027 see a positive balance.
Those who look toward 2030 see the real challenge.
The multi-year projections show that structural obligations will increasingly put pressure on Curaçao’s future fiscal space. Beginning in 2029, for example, government contributions to the SVB stabilization fund are projected at approximately XCG 48 million in 2029 and XCG 129 million in 2030.
The annual financial burden related to ENNIA is also projected to increase from approximately XCG 2 million to XCG 32 million.
These are not problems that disappear because of one strong budget year.
Fiscal sustainability is therefore not only about today’s balance. It is about how much room remains available tomorrow.
CMC: Resolving the Past Is Not a Structural Solution
The Curaçao Medical Center also remains an important financial issue.
The Board of Financial Supervision (Cft) has indicated that there is insufficient insight into CMC’s current financial position and the financial consequences of a comprehensive solution. As a result, it could not determine whether all financial consequences had been fully and correctly incorporated into the budget.
The government has since presented a proposed solution and measures aimed at improving efficiency and controlling costs.
That is necessary. But resolving a historical financial problem is not the same as creating structural financial health.
The relevant question is therefore not simply how much money is needed to resolve the past, but what will change structurally to prevent Curaçao from facing the same problem again in five or ten years.
Budgeting Is One Thing. Delivering Is Another.
The revenue side of the budget also deserves scrutiny. The government expects higher tax revenues, but those revenues must ultimately be collected.
The Advisory Council rightly points to the risk that passing legislation does not automatically mean that measures can become operational on time. Implementation requires regulations, work processes, IT systems and sufficient administrative capacity.
A budget projection is therefore not revenue until the money has actually been collected.
The same principle applies to key performance indicators, or KPIs. More indicators do not automatically mean better policy. A KPI has value only when it genuinely measures whether a policy is working and provides a basis for making adjustments when necessary.
A budget does not become results-oriented simply because it contains more numbers. It becomes results-oriented when those numbers demonstrate what government policy actually delivers.
The next step should therefore not be more KPIs.
It should be better KPIs.
Public Money Must Create Public Value
The budget increases projected dividend income by approximately XCG 30 million, including dividends from Curoil, Curaçao Airport Holding, Curaçao Ports Authority and the Central Bank of Curaçao and Sint Maarten (CBCS).
That additional revenue is welcome.
But dividend projections must be based on realistic profit expectations and a clear government shareholder policy.
Good public ownership does not simply mean extracting as much dividend as possible for the government treasury. It means ensuring that public companies are professionally governed, financially healthy, capable of managing risks and able to create value for society.
Public assets must create public value.
The Surplus Is a Beginning, Not the Final Verdict
The 2027 Budget has improved. Its structure is clearer, projections are better substantiated, and greater attention is being paid to risks, KPIs and investment.
That should be acknowledged.
But precisely because of these improvements, Curaçao should now raise the standards applied to its financial policy.
The debate should not stop with the question: “Is the budget balanced?”
The real questions are whether revenues are structural and realistic; whether higher expenditures are efficient and measurably effective; whether investments generate sufficient economic and social value; whether the debt strategy is strong enough for the challenges approaching in 2030; whether structural problems involving CMC and the social funds are genuinely being resolved; and how much fiscal policy space Curaçao will retain if the economy underperforms.
The debate over the 2027 Budget should therefore not end with the XCG 84.8 million surplus. That figure tells us what is expected to remain on paper in 2027. The real measure of success is how much financial room Curaçao will have afterward.
An XCG 84.8 million surplus is a result. It is not yet proof of fiscal sustainability.
Curaçao needs more than a balanced budget. It needs financial policy that is responsible today, executable tomorrow and still sustainable the day after.
A surplus is a result.
Fiscal sustainability is a choice.
Drs. Luigi A. Faneyte MSc. CFE CICA CCS
Economist, financial expert and parliamentary staff member for PAR in the Curaçao Parliament