The current-account deficit, estimated at 17.7% of GDP in 2017, is forecast to narrow in 2018-19, owing largely to a recovery in services earnings on the back of an increase in stopover tourism. 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 are expected to result in a modest narrowing of the current-account deficit, to an average of 14.3% of GDP in 2018-19.

Inward foreign direct investment (FDI), which had stabilised in recent years 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 has access to bilateral and multilateral loans, and we expect this to remain the case, minimising the risk of a balance-of-payments crisis. International reserves for the currency union with Sint Maarten stood at US$1.4bn at the end of February (down from US$1.5bn at end-2016), providing just over five months of import cover.