Update Country Report Curaçao 07 Dec 2020

Event

On December 1st the government of the prime minister, Eugene Rhuggenaath, introduced a series of new social restrictions designed to halt a spike in coronavirus (Covid-19) cases, which have been climbing since October.

Analysis

As at December 6th Curaçao had registered 3,011 cases and seven deaths. The infection rate is rising, with 121 positive results recorded on December 6th alone. In part, the renewed outbreak appears to be linked to a recovery in the tourism sector as the Caribbean enters the post-hurricane high season. The new restrictions ban bars, cafes and restaurants from serving alcohol in a bid to deter socialising; drinking alcohol in public places is also prohibited. Indoor dining at restaurants is suspended, and the current 21.00-04.30 curfew has been extended until December 21st.

The government has also pushed through new emergency legislation, which was approved by the parliament on December 4th by 11 votes to 9, giving the government the power to declare a state of emergency, which carries with it the executive ability to impose restrictions on certain civil liberties. As a concession to the opposition, which argued that the legislation grants the executive undue power, a last-minute amendment stipulates that parliament must meet within 48 hours of a state of emergency being declared to vote on how long it should last.

It is likely that the government will declare a state of emergency in the short term, giving it the power to more closely monitor and enforce compliance with Covid-19 restrictions. For example, people or businesses found to be non-compliant can be fined, with a list of violations and resulting fines set to be published by the second week in December.

Impact on the forecast

The new restrictions will weigh on domestic consumption in December and potentially into 2021 if the caseload does not decline. We will therefore revise down our real GDP growth forecast for 2021 slightly, from 6.3% at present; our forecast is subject to additional downward revisions, especially if key tourism source markets such as the Netherlands remove Curaçao from their permitted travel lists.