Country Report Curaçao 4th Quarter 2018

Outlook for 2019-20: External sector

The current-account deficit, which grew to 21.8% of GDP in 2017, is estimated to have narrowed slightly in 2018, to a still-large 20% of GDP. We are forecasting a continued decline in the size of the deficit in 2019-20, 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 13.4% of GDP by 2020. 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.

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