Update Country Report Curaçao 28 Feb 2017

Event

Unemployment in Curaçao rose to 13.3% in 2016 according to the latest Labour Force Survey conducted by the Central Bureau of Statistics (CBS).

Analysis

According to the report, which is released once a year and covers the September-October period, overall employment on the island rose by 5.3% compared with 2015, resulting in a total of 65,100 in the labour force. However, the number of job seekers jumped by 21.4% compared with 2015, to a total of 9,953. The result of this was an increase in the unemployment rate to 13.3%, from 11.7% in 2015.

The rise in employment did not correspond to an improvement in job quality. The report showed that although the largest share of jobs was held by permanent workers (58.9%), the biggest increase in employment was from non-permanent positions (the so-called "gig economy"). This could result in worker frustration seeping into political dissatisfaction, particularly if the economy were to remain sluggish and job security precarious.

Small Caribbean countries often have high levels of unemployment due to numerous structural factors, such as lack of diversification and the semi-permanent nature of some sectors such as tourism. Therefore, the 13.3% rate, while high, does not appear to be destabilising. Nevertheless, the trend of rising precarious employment is concerning, as it will mask the scale of looseness in the labour market.

Impact on the forecast

We expect unemployment to remain high on the island, with forecast average GDP growth in 2017-18 of just 0.4% preventing a major improvement in the unemployment rate. There is a risk that continued high levels of unemployment and job insecurity will fuel political discontent.