We forecast that real GDP growth will decelerate to 3.7% in 2023 as an economic slowdown and high inflation rates in the US, the euro zone and the Netherlands-main sources of tourists to Curaçao-affect disposable incomes in those countries. Another risk is the escalation of the war in Ukraine, which could keep prices higher for longer, subduing tourism and investments.

Although we do not forecast components of real GDP, we expect economic activity in 2023-24 to be driven by consumption (especially private consumption), which will be aided by a continuation of some fiscal support measures and sustained growth in tourist arrivals. Investment in the tourism sector will also help to buoy growth, despite uncertainty stemming from global inflation and tightening financing conditions. Activity at the Isla oil refinery is expected to restart in the first quarter of 2023, under the operation of a consortium of seven US and Brazilian companies, but there are risks of delays, as the contract, which was expected to be signed by early September, has not yet been announced.