Country Report Curaçao 2nd Quarter 2015

Outlook for 2015-16: Fiscal policy

Under the tutelage of the Kingdom Council of the Netherlands, the government is continuing its fiscal consolidation efforts. A financial supervision arrangement with the Dutch government will maintain pressure for fiscal reform and limit the risk that populist policies will be adopted in advance of the 2016 elections. Expenditure is being held down (a spending freeze has been in place since 2012), but low tax revenue due to the continued weakness of the economy will prevent the swift repayment of accrued fiscal deficits. Given only minimal economic growth, further reforms will be needed to increase revenue and reduce expenditure in order if the deficit is to be prevented from widening. However, the private sector will resist new tax measures, arguing that these would hinder competitiveness and hold back economic recovery.

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