After averaging an estimated 2.6% in 2019, annual inflation will pick up in 2020 and average 3.7%, in part owing to indirect tax measures (a general spending tax is to be introduced in April), which will push up consumer prices. Oil prices are forecast to dip in 2020 (partly owing to the impact of the coronavirus on demand), but will trend upwards in 2021. Even so, our 2021 inflation forecast is for a further slight moderation, partly owing to base effects. We expect inflation that year to average 3.5%, as the subdued state of the economy will preclude a more marked rise in prices.

Risks to our forecasts stem from the potential for higher oil prices and further tax measures to shore up the public finances. With much of Curaçao's consumer basket composed of imports, the country will remain vulnerable to global price trends.