Country Report Curaçao 2nd Quarter 2022

Outlook for 2022-23: External sector

We forecast that the structurally large current-account deficit will widen to 21% of GDP in 2022 and then narrow to 17.6% of GDP in 2023, from an estimated 20.4% in 2021. Our forecast for this year is based on a rise in food and fuel prices amid ongoing supply-chain disruptions caused by Russia's invasion of Ukraine. This will lift the import bill dramatically, but the recovery in tourism will keep the current-account deficit from widening significantly. The deficit should then narrow in 2023 as commodity prices soften slightly and tourism growth accelerates. As at mid-March 2021 official reserves for the currency union with Sint Maarten stood at a comfortable Naf4.3bn (US$2.3bn, or 83% of GDP), with foreign-exchange reserves at Naf3bn.

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