The Centrale Bank van Curaçao en Sint Maarten (CBCS, the Curaçao and Sint Maarten joint Central Bank) has reported that GDP rose by 1.4% during the second quarter of 2014, compared with a 0.6% rise recorded in the same period the previous year.
The CBCS's most recent economic performance report issued last December revealed that GDP grew during the second quarter of 2014 at a faster pace than the same period a year earlier, evidence of a continued economic recovery. The increase was led by tourism-related industries: the wholesale and retail trade, restaurant and hotels, and transport, storage and communication sectors all showed strong GDP growth. This rise outstripped weakness in the construction, manufacturing and real estate, renting, and business activity sectors, which all contracted during the quarter. Tourism-led growth was propelled by higher overnight arrivals-the second quarter saw an 11.9% rise from the same period in 2013-and more cruise passengers (quarterly passenger statistics are not available, but Caribbean Tourism Organisation figures show that over 1.54m passengers visited Sint Maarten during the first ten months of 2014, a 16.5% rise from 2013). According to the CBCS, the arrival gains were the result of more airlift from Canada and the US, new cruise routes and overall improved economic conditions in North America and Europe. The bank stated that the number of Caribbean and South American visitors is also increasing, with the exception of Venezuela, amid the deteriorating economic conditions in that country.
Tax revenue grew by 4.1% during the second quarter and government expenditure dropped by 1.4%. The second quarter saw a public deficit of Naf$14.9m (US$8.3m), although this marks an improvement from the US$11.6m deficit experienced in the same quarter of 2013. Improving government finances and increased public investment-officials secured US$79.8m funding through a June 2014 bond offering to finance the completion of an unfinished government office building-will further support GDP growth this year.
Impact on the forecast
The data are in line with our estimate that GDP grew by 1.5% in 2014 and our forecast for a further acceleration in GDP to 1.9% in 2015.