Economic growth in Curaçao will accelerate in 2022 to 11.5%, after the economy showed a modest and partial recovery in 2021 of an estimated 6.5%. Growth in 2022 will be driven by a sharper rise in tourism inflows as vaccine coverage in major source markets continues to increase. Downside risks to our 2022 outlook stem from the emergence in late November of the highly mutated Omicron variant of covid-19, which, depending on its transmissibility and the severity of infections caused, could force the government to adopt fresh lockdown measures in an attempt to stem the spread of the virus, constraining GDP.

Although we do not forecast components of real GDP, we expect recovery in 2022-23 to be driven by consumption (especially private consumption), aided by some continued fiscal support measures, and an anticipated pick-up in tourist arrivals from the fourth quarter. On the investment front, we expect pandemic-related uncertainties to linger throughout the forecast period, causing businesses to delay investment projects further. No significant public investment projects are currently pencilled in for 2022, but activity restarting at the Isla oil refinery next year poses upside risks to our growth forecast for that year. However, any revival in activity is expected only in late 2022, as the government is looking for an operator for the refinery after its Brazilian partner, Roberto Viana, pulled out of the deal. Therefore, maintaining liquidity support from the Netherlands will be crucial in stimulating recovery in 2022-23.