Country Report Curaçao 2nd Quarter 2022

Outlook for 2022-23: Inflation

Demand growth and rising oil prices pushed inflation up to 4.8% at end-2021. We expect consumer price inflation to rise further in 2022, ending the year at 7.2%, on the back of global supply-chain disruptions caused by the Russian invasion of Ukraine; this will keep prices of oil and food elevated, which will particularly affect Curaçao, as it imports a significant share of its food. Although monetary policy mechanisms are weak, a tightening cycle that we expect to begin this year will help to keep inflation in check. A stabilisation of import prices in 2023 will temper inflation, taking it to 3.7% by the end of the year. Risks to our forecasts include further tax increases as part of efforts to shore up the public finances, as well as an escalation of the war in Ukraine, which could keep global commodity prices higher for longer. As much of Curaçao's consumer basket is composed of imports, the country will remain vulnerable to global price trends.

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