Outlook for 2017-18

• Elections held on October 5th 2016 resulted in a ruling coalition led by the Partido MAN and a new prime minister, Hensley Koeiman. Political stability will remain fragile, particularly if intra-coalition unity falters.
• Progress on fiscal consolidation and tackling corruption will be gradual and subject to opposition pressure. Tougher counter-narcotics action in Central America poses a risk to security in the form of diverted drug flows.
• The Kingdom Council of the Netherlands will continue to provide fiscal supervision to Curaçao and help it to maintain a balanced budget. A public debt/GDP ratio of over 40% adds an element of fiscal risk.
• The economy stagnated in 2016 and will record only a modest expansion in 2017-18, of just 0.4% per year on average, with growth hindered by public spending cutbacks and weak consumer demand.
• A fragile economic recovery and deflationary pressures emanating from low oil prices will keep inflation at bay in 2017-18, when it will average just 2%.
• The current-account deficit will continue to narrow, but will remain large. Recovering tourism demand abroad will push up services receipts, while the merchandise trade deficit will narrow, owing to cheaper oil imports.

Review

• Mr Koeiman, dissolved parliament following the withdrawal of the Partido Soberano from the ruling coalition. A coalition of 11 opposition MPs is currently acting as the new majority.
• New elections will be held on April 28th, just a few months after the previous scheduled elections on October 5th. Since Curaçao achieved self-government in 2010, no administration has lasted its full term.
• The prime minister of Sint Maarten, William Marlin, has renewed his call for the country to appoint its own attorney-general, superseding its current shared arrangement with Curaçao.
• Unemployment in rose to 13.3% in 2016, according to the latest Labour Force Survey conducted by the Central Bureau of Statistics, highlighting the weak state of the economy.