The current-account deficit, which grew to 21.8% of GDP in 2017, is forecast to narrow slightly in 2018-19, owing largely to a recovery in services earnings on the back of an increase in arrivals and higher-paying tourists. Continued modest growth in investment and the economy as a whole will begin to push up demand for imported goods, but the trade deficit will continue to narrow slightly as a share of GDP as oil import costs remain contained. Overall, these trends will narrow the current-account deficit to 17.4% of GDP by 2019.
Inward foreign direct investment (FDI), which had stabilised in response to recovering tourism (the FDI figure in 2015 of US$146.4m was the highest since 2008), has slipped more recently, to US$133.1m in 2016; we expect this trend to reverse in 2018 on the back of post-hurricane reconstruction works. However, more significant inflows will not be forth-coming until government reform efforts improve competitiveness.
Curaçao will maintain access to bilateral and multilateral loans, minimising the risk of a balance-of-payments crisis. International reserves for the currency union with Sint Maarten stood at around US$1.2bn at the end of August, providing around five months of import cover.