Update Country Report Curaçao 11 Jan 2022

Event

In early January Curaçao's government formally requested medical assistance from the Netherlands in response to a sharp increase in covid-19 cases caused by the spread of the Omicron variant. The rising caseload domestically and in the island's main tourism source markets is likely to disrupt the economic recovery.

Analysis

The prime minister, Gilmar Pisas, requested 16-20 additional medical personnel to assist with the spike in coronavirus cases. The daily caseload is at a record high and is still climbing: the seven-day average of infections surpassed 800 on January 8th. The government has attributed the sharp upturn in cases to the swift spread of the Omicron variant.

Although the government noted that the rise in cases had not yet led to a serious increase in hospital admissions, it did say that large numbers of hospital workers and other medical staff were unable to work because of the virus, causing shortages of personnel to provide routine treatment, as well as coronavirus-related care. This situation prompted the local authorities to request Dutch assistance, particularly as medical staff shortages are set to worsen in the coming weeks, as cases are likely to increase further owing to the highly transmissible variant.

Despite the increase in cases, the government has stated that it is not currently considering imposing a fresh lockdown or curfew. Mr Pisas recognised that the economic impact of another lockdown, especially on tourism, would be dire for Curaçao. Prior to the emergence of Omicron globally in December, the domestic tourism industry was staging a substantial recovery; arrivals in November were just 15% below pre-pandemic (February 2020) levels. However, disruptions caused by the new variant are likely to dampen visitor numbers during the traditional high tourism season that will run until March. As a case in point, in late December the Curaçaoan authorities refused to allow a cruise ship to dock because 55 passengers had contracted covid-19.

Impact on the forecast

The rise in cases is likely to weigh on tourism revenue and could undermine economic activity in the first quarter of the year. As such, we will be revising down our 2022 GDP growth forecast.