WILLEMSTAD – Nearly two-thirds of households in Curaçao report that they do not have sufficient financial room to comfortably meet interest and repayment obligations on loans or other debts, raising concerns that higher living costs and borrowing costs could leave a large segment of the population increasingly vulnerable to financial setbacks.
According to economist and financial expert Luigi A. Faneyte, the Enkuesta Sosial 2025 conducted by the Central Bureau of Statistics shows that 64.1% of households report insufficient financial room for interest and debt repayments.
Faneyte, who is also a parliamentary staff member for PAR, highlighted the figure in the second installment of an analysis on purchasing power and household finances in Curaçao.
He cautioned that the 64.1% figure should not be interpreted as meaning that nearly two-thirds of Curaçao households have problematic debts. Rather, the survey indicates that a significant portion of households believe they lack sufficient financial room to comfortably carry their debt obligations.
The distinction is important because mortgages, car loans and other forms of financing are not inherently problematic. According to Faneyte, the danger emerges when recurring debt payments consume such a large share of disposable income that households have little capacity to absorb unexpected expenses.
A household can also be financially vulnerable without officially living below the poverty line, he argues. Working families may earn enough to remain above the poverty threshold while having little or no savings after paying housing, utilities, transportation and debt obligations.
Higher borrowing costs could add further pressure.
Faneyte points to recent increases in policy rates in the United States and Curaçao and Sint Maarten. Higher policy rates do not automatically mean that every existing household loan becomes more expensive, but they can contribute to higher financing costs, particularly for new borrowing and loans with interest rates that can change.
The analysis comes as Curaçao households are also confronting increases in several essential expenses, including electricity, water and fuel.
Faneyte argues that policymakers should therefore avoid assessing purchasing power solely through inflation or income figures. Instead, he says, attention should be given to the combined effect of essential expenses, debt repayments, interest costs and the financial reserves households have available.
The implications could extend beyond individual families.
When households must devote more income to servicing debt, less money is available for consumption elsewhere in the economy. Faneyte warns that widespread household financial pressure can therefore affect businesses, economic activity and eventually government tax revenues.
He also points to the Council of Advice’s assessment of the 2027 budget, saying the advisory body has identified potential links between household debt and financial stability, consumer spending, economic activity, tax revenues, social services, debt assistance, housing and social cohesion.
Curaçao’s vulnerability to external developments adds another layer of risk. Faneyte cites a United Nations analysis that describes the island as having improved macroeconomic stability while remaining exposed to external shocks, including energy-price risks, geopolitical developments, climate change and growing dependence on tourism.
For households without savings, an unexpected event such as illness, job loss, a major repair or another sharp increase in living expenses can therefore become particularly difficult to absorb.
Faneyte argues that Curaçao’s policy debate should consequently focus not only on helping people once they are already deeply indebted, but also on preventing financially stretched households from reaching that stage.
The central measure of household resilience, he says, is ultimately how much money remains each month after essential living expenses and financial obligations have been paid.