Curaçao's economic landscape has experienced notable growth, with a 5 percent expansion in 2024 driven by robust tourism activity. This sector's strong performance has positively impacted other areas such as wholesale trade, real estate, and construction. However, the current account deficit widened due to increased imports related to construction.
The government is focusing on sustainable and green growth while managing public finances amidst global uncertainty. Key priorities include upgrading tourist experiences, diversifying the economy, improving labor market conditions, and reforming the tax system equitably. Recent initiatives include pension increases, health cost containment reforms, educational infrastructure investments, and advancements towards renewable energy targets.
Growth projections for 2025 suggest moderation to 4 percent amid global uncertainties before stabilizing at 2 percent over the medium term. Continued tourism expansion and fiscal investments will support this growth trajectory. Risks include external trade shocks potentially affecting inflation and demand for tourism services.
Fiscal policies aim to sustain medium-term debt targets by balancing investment needs with social spending pressures. Healthcare reforms are critical due to ongoing deficits in healthcare funds. Pension adjustments for low-income households are also under consideration.
Efforts to boost formal employment focus on incentivizing education access and enhancing productivity in the formal sector. Education investments align with recommendations from structural reform packages agreed upon with the Netherlands.
In terms of competitiveness, authorities aim to diversify tourism markets and improve infrastructure. Non-tourism sectors are being developed to enhance resilience against global shocks.
The monetary policy stance supports economic stability within the Monetary Union of Curaçao and Sint Maarten. Despite a widening current account deficit in 2024 due to construction-related imports, future improvements are anticipated through stronger travel receipts and renewable energy investments.
Mortgage credit growth in Curaçao continues at a significant pace post-pandemic but requires close monitoring for potential vulnerabilities in household balance sheets.
The IMF mission acknowledges the cooperation received during discussions held from June 18-25.