{
  "title": "IMF Executive Board Concludes 2019 Article IV Consultation with Curaçao and Sint Maarten",
  "publication": "IMF News, April 1, 2020",
  "sourceUrl": "https://www.imf.org/en/news/articles/2020/04/01/pr20128-curacao-and-sint-maarten-imf-executive-board-concludes-2020-article-iv-consultation",
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  "summary": "Selected economic and financial indicators, 2016–21 (Real economy, balances, debt, external) - Real GDP (percent change): 2016: -0.9; 2017: -1.7; 2018: -2.2; 2019: -2.0; 2020: 0.0; 2021: 1.5 - CPI (12-month average): 2016: 1.6; 2017: 2.6; 2018: 3.7; 2019: 2.9 - Unemployment rate (percent): 2016: 13.",
  "publishDate": "2020-04-01",
  "sections": [
    {
      "heading": "Overview and context",
      "content": "- Executive Board concluded the Article IV consultation with Curaçao and Sint Maarten and considered and endorsed the staff appraisal without a meeting.\n- Analysis reflects discussions with the Kingdom of the Netherlands—Curaçao and Sint Maarten authorities in November 2019 and is based on the information available as of March 3, 2020.\n- The note was prepared before COVID-19 became a global pandemic and therefore does not reflect the implications of COVID-19; the outbreak has significantly worsened the outlook and greatly amplified uncertainty and downside risks."
    },
    {
      "heading": "Recent economic performance",
      "content": "- Curaçao\n  - Has been in a recession since 2016 largely due to spillovers from the Venezuela crisis.\n  - Real GDP contracted by an estimated 2 percent in 2019.\n  - Unemployment rate increased to 21.2 percent in April 2019.\n- Sint Maarten\n  - Economy severely damaged by Hurricanes Irma and Maria in 2017.\n  - Despite €550 million pledged by The Netherlands for reconstruction, rebuilding has been slow.\n  - Real GDP is estimated to have contracted by almost 17 percent in 2017−18 and rebounded by an estimated 5 percent in 2019."
    },
    {
      "heading": "Fiscal developments",
      "content": "- Curaçao\n  - Primary fiscal deficit declined from 2½ percent of GDP in 2017 to 1.3 percent of GDP in 2019.\n  - Net operating (current) deficit declined to 0.3 percent of GDP in 2019 due to revenue-raising and expenditure-containment measures.\n- Sint Maarten\n  - Hurricanes widened the primary fiscal deficit excluding Trust Fund operations to 4 percent of GDP in 2018.\n  - Primary deficit declined to 0.8 percent of GDP in 2019 due to economic recovery."
    },
    {
      "heading": "External sector and reserves",
      "content": "- The Union’s external position worsened since 2016.\n- Current account deficit (CAD) for the union widened from 15.2 percent of union GDP in 2017 to an estimated 21.8 percent of GDP in 2019, mainly because of a larger CAD in Curaçao where imports increased significantly.\n- International reserves declined mildly from 4.4 to 4.0 months of imports of goods and services between 2017 and 2019 despite double-digit CADs."
    },
    {
      "heading": "Executive Board assessment — growth outlook and risks",
      "content": "- Growth projections\n  - Curaçao: After 4 years of continuous recession, real GDP expected to remain flat in 2020 and grow by 1½ percent in 2021 as agreement with the Klesch Group is expected to revive the Isla refinery; medium-term growth expected to return to around ½ percent.\n  - Sint Maarten: Real GDP expected to grow by 2.9 percent in 2020, gradually converging to 2 percent in the medium term.\n- External positions in both countries are weaker than warranted by fundamentals and desired policy settings.\n- Downside risks\n  - Curaçao: Vulnerable to setbacks in reviving the refinery and to financial system fragilities; delays could lead to exchange rate pressures.\n  - Sint Maarten: Recovery vulnerable to delays in key projects (e.g., airport reconstruction) and frequent government changes that impede reform implementation.\n  - Both countries vulnerable to a slowdown in main trading partners."
    },
    {
      "heading": "Policy recommendations and priorities",
      "content": "- Fiscal policy\n  - Introduce a Fiscal Responsibility Framework with a central government debt ratio as a long-term anchor and operational rules calibrated to meet it.\n  - Set a relatively low debt target of 40 percent of GDP to provide more fiscal space for negative shocks.\n  - Include clearly articulated escape clauses for justified deviations while retaining sustainable policies.\n  - Curaçao: Signage of the Growth Accord with The Netherlands and implementation of measures are welcome; broaden the base of the planned general consumption tax to domestically produced goods in conjunction with a comprehensive tax offset mechanism.\n  - Sint Maarten: Sustain reforms to improve revenue administration, strengthen PFM and restore financial sustainability of the health sector; secure financing for reforms to avoid delays.\n- Monetary and exchange rate policy\n  - CBCS should strengthen monetary policy to support the peg.\n  - Develop a policy rate to communicate the stance of monetary policy and be prepared to increase interest rates to prevent capital outflows.\n  - Use certificates of deposit more vigorously to absorb excess liquidity.\n  - Over the longer term, consider revising the standing subscription framework to allow development of domestic debt markets.\n- Financial sector\n  - Develop a strategy to address financial sector vulnerabilities aimed at preserving financial stability while minimizing fiscal costs.\n  - Conduct a thorough diagnostic of deposit takers and define a strategy to deal with identified issues.\n  - Significantly strengthen supervision and completely overhaul the bank resolution framework.\n  - Be prepared to recapitalize the CBCS if costs related to monetary policy or addressing financial system vulnerabilities reduce its capital buffer.\n- Structural reforms and resilience\n  - Implement broad structural reforms to raise potential growth: improve business environment, increase labor market flexibility while fine-tuning safety nets, and address skills gaps.\n  - Update tourism master plans in both countries.\n  - Sint Maarten should develop a comprehensive disaster resilience strategy.\n- Governance, AML/CFT and institutional capacity\n  - Improve governance framework across the board; address vulnerabilities in the financial sector governance.\n  - CBCS needs to complete its governance structure by appointing a President.\n  - Increase efforts to strengthen the AML/CFT framework in both countries.\n  - Strengthen internal controls and public financial management to reduce opportunities for corruption.\n  - Operationalize integrity bodies in both countries.\n  - Develop capacity of public institutions and enhance quality of statistics; Sint Maarten should enhance capacity to absorb aid.\n  - Significantly improve data availability and quality for effective surveillance."
    },
    {
      "heading": "Key statistics — Curaçao (selected)",
      "content": "- Area: 444 (km2)\n- Population, thousand (2017): 160\n- Percent of population below age 15 (2017): 18.7\n- Literacy rate, in percent (2010): 96.7\n- Percent of population aged 65+ (2017): 16.4\n- Life expectancy at birth, male (2016): 74.8\n- Infant mortality, over 1,000 live births (2016): 11.2\n- Life expectancy at birth, female (2016): 81.1\n\nSelected economic and financial indicators, 2016–21 (Real economy, balances, debt, external)\n- Real GDP (percent change): 2016: -0.9; 2017: -1.7; 2018: -2.2; 2019: -2.0; 2020: 0.0; 2021: 1.5\n- CPI (12-month average): 2016: 1.6; 2017: 2.6; 2018: 3.7; 2019: 2.9\n- Unemployment rate (percent): 2016: 13.3; 2017: 14.1; 2018: 13.4; 2019: 19.0; 2020: 18.1\n- Net operating (current) balance, central government (percent of GDP): 2016: -0.4; 2017: -2.1; 2018: -1.2; 2019: -0.3; 2020: -0.7; 2021: 1.1\n- Primary balance, general government (percent of GDP): 2016: -3.1; 2017: -2.5; 2018: -1.0; 2019: -1.3; 2020: 0.8\n- Central government debt 1/ (percent of GDP): 2016: 50.6; 2017: 54.5; 2018: 54.6; 2019: 54.0; 2020: 56.0\n- Current account (percent of GDP): 2016: -18.7; 2017: -21.9; 2018: -28.7; 2019: -20.8; 2020: -20.5; 2021: -19.1\n- Goods trade balance (percent of GDP): 2016: -34.1; 2017: -33.5; 2018: -38.6; 2019: -33.9; 2020: -35.5\n- Exports of goods (percent of GDP): 2016: 11.6; 2017: 13.6; 2018: 16.9; 2019: 15.0; 2020: 13.8\n- Imports of goods (percent of GDP): 2016: 45.7; 2017: 47.1; 2018: 55.5; 2019: 48.9; 2020: 47.3; 2021: 48.8\n- Service balance (percent of GDP): 2016: 17.2; 2017: 11.8; 2018: 9.7; 2019: 12.7; 2020: 17.0\n- Exports of services (percent of GDP): 2016: 45.5; 2017: 43.0; 2018: 44.5; 2019: 42.8; 2020: 44.7; 2021: 48.2\n- Imports of services (percent of GDP): 2016: 28.3; 2017: 31.3; 2018: 34.9; 2019: 30.2; 2020: 31.1; 2021: 31.2\n- External debt (percent of GDP): 2016: 125.5; 2017: 133.3; 2018: 145.7; 2019: 153.7; 2020: 158.9; 2021: 162.8\n\nMemoranda (Curaçao)\n- Nominal GDP (millions of U.S. dollars): 2016: 3,122; 2017: 3,117; 2018: 3,128; 2019: 3,146; 2020: 3,263; 2021: 3,408\n- Per capita GDP (U.S. dollars): 2016: 19,473; 2017: 19,478; 2018: 19,714; 2019: 19,908; 2020: 20,668; 2021: 21,587\n- Per capita GDP (percent change): 2016: -1.8; 2017: 1.2; 2018: 1.0; 2019: 3.8; 2020: 4.4\n- Private sector credit (percent change): 2017: 2.4; 2018: 2.5; 2019: 2.2\n\nFund position and exchange rate (Curaçao)\n- Curaçao is part of the Kingdom of the Netherlands and does not have a separate quota.\n- The Netherlands Antillean guilder is pegged to the U.S. dollar at NAf 1.79 = US$1.\n\nSources: Data provided by the authorities; and IMF staff estimates.\nNote: 1/ Defined as balance sheet liabilities of the central government except equities. Includes central government liabilities to the social security funds."
    },
    {
      "heading": "Key statistics — Sint Maarten (selected)",
      "content": "- Area: 34 (km2)\n- Population, thousand (2018): 41\n- Percent of population below age 15 (2018): 20\n- Literacy rate, in percent (2011): 93.8\n- Percent of population aged 65+ (2018): 7.9\n- Life expectancy at birth, male (year not specified in table): 74.0\n- Infant mortality, over 1,000 live births (2010): 6.0\n- Life expectancy at birth, female (year not specified in table): 80.6\n\nSelected economic and fiscal indicators (series as presented in source)\n- Real GDP (percent change): 2018: 0.4; 2019: -8.4; 2019/2018 entries in source vary (see original table for full year-to-year series).\n- Primary balance excluding Trust Fund operations 1/ (percent of GDP): 2016: 2.0; 2017: -2.9; 2018: -4.0; 2019: -0.8; 2020: -2.3\n- Current balance (Authorities' definition) 2/: 2016: -5.3; 2017: -1.9; 2018: -1.4\n- Overall balance (percent of GDP): 2016: 1.4; 2017: -3.6; 2018: -3.8; 2019: -1.6; 2020: 1.3; 2021: 4.9\n- Central government debt 3/ (percent of GDP): 2016: 46.0; 2017: 54.4; 2018: 51.3; 2019: 52.6; 2020: 55.3\n- External debt (percent of GDP): 2016: 236.0; 2017: 267.1; 2018: 266.3; 2019: 265.0; 2020: 255.4; 2021: 252.8\n\nMemoranda (Sint Maarten)\n- Nominal GDP (millions of U.S. dollars): 2016: 1,072; 2017: 1,014; 2018: 954; 2019: 1,009; 2020: 1,064; 2021: 1,115\n- Per capita GDP (U.S. dollars): 2016: 27,203; 2017: 25,010; 2018: 23,495; 2019: 24,526; 2020: 25,545; 2021: 26,423\n- Per capita GDP (percent change): 2016: -8.1; 2017: -6.1; 2018: 4.2; 2019: 3.4; 2020: 0.9\n\nNotes (Sint Maarten)\n- Sint Maarten is part of the Kingdom of the Netherlands and does not have a separate quota.\n- 1/ Excludes capital expenditure and Trust Fund-financed special projects.\n- 2/ Revenue excl. grants minus interest income, current expenditure and depreciation of fixed assets.\n- 3/ The 2016 stock is based on financial statements. Values in subsequent years are staff's estimates and are higher than under authorities' definition.\n\nPress Release No. 20/128; IMF Communications Department, April 1, 2020. The analysis is based on information available as of March 3, 2020 and staff discussions in November 2019.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- IMF COVID-19 Hub\n- Policy Tracker\n- Financial Assistance\n- Questions & Answers\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2020/04/01/pr20128-curacao-and-sint-maarten-imf-executive-board-concludes-2020-article-iv-consultation"
    }
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    "Published: April 1, 2020",
    "Executive Board concluded the Article IV consultation with Curaçao and Sint Maarten and considered and endorsed the staff appraisal without a meeting.",
    "Analysis reflects discussions with the Kingdom of the Netherlands—Curaçao and Sint Maarten authorities in November 2019 and is based on the information available as of March 3, 2020.",
    "The note was prepared before COVID-19 became a global pandemic and therefore does not reflect the implications of COVID-19; the outbreak has significantly worsened the outlook and greatly amplified uncertainty and downside risks.",
    "Curaçao",
    "Sint Maarten",
    "Curaçao",
    "Sint Maarten",
    "The Union’s external position worsened since 2016.",
    "Current account deficit (CAD) for the union widened from 15.2 percent of union GDP in 2017 to an estimated 21.8 percent of GDP in 2019, mainly because of a larger CAD in Curaçao where imports increased significantly.",
    "International reserves declined mildly from 4.4 to 4.0 months of imports of goods and services between 2017 and 2019 despite double-digit CADs.",
    "Growth projections",
    "External positions in both countries are weaker than warranted by fundamentals and desired policy settings.",
    "Downside risks",
    "Fiscal policy",
    "Monetary and exchange rate policy",
    "Financial sector",
    "Structural reforms and resilience",
    "Governance, AML/CFT and institutional capacity",
    "Area: 444 (km2)",
    "Population, thousand (2017): 160",
    "Percent of population below age 15 (2017): 18.7",
    "Literacy rate, in percent (2010): 96.7",
    "Percent of population aged 65+ (2017): 16.4",
    "Life expectancy at birth, male (2016): 74.8",
    "Infant mortality, over 1,000 live births (2016): 11.2",
    "Life expectancy at birth, female (2016): 81.1",
    "Real GDP (percent change): 2016: -0.9; 2017: -1.7; 2018: -2.2; 2019: -2.0; 2020: 0.0; 2021: 1.5",
    "CPI (12-month average): 2016: 1.6; 2017: 2.6; 2018: 3.7; 2019: 2.9",
    "Unemployment rate (percent): 2016: 13.3; 2017: 14.1; 2018: 13.4; 2019: 19.0; 2020: 18.1",
    "Net operating (current) balance, central government (percent of GDP): 2016: -0.4; 2017: -2.1; 2018: -1.2; 2019: -0.3; 2020: -0.7; 2021: 1.1",
    "Primary balance, general government (percent of GDP): 2016: -3.1; 2017: -2.5; 2018: -1.0; 2019: -1.3; 2020: 0.8",
    "Central government debt 1/ (percent of GDP): 2016: 50.6; 2017: 54.5; 2018: 54.6; 2019: 54.0; 2020: 56.0",
    "Current account (percent of GDP): 2016: -18.7; 2017: -21.9; 2018: -28.7; 2019: -20.8; 2020: -20.5; 2021: -19.1",
    "Goods trade balance (percent of GDP): 2016: -34.1; 2017: -33.5; 2018: -38.6; 2019: -33.9; 2020: -35.5",
    "Exports of goods (percent of GDP): 2016: 11.6; 2017: 13.6; 2018: 16.9; 2019: 15.0; 2020: 13.8",
    "Imports of goods (percent of GDP): 2016: 45.7; 2017: 47.1; 2018: 55.5; 2019: 48.9; 2020: 47.3; 2021: 48.8",
    "Service balance (percent of GDP): 2016: 17.2; 2017: 11.8; 2018: 9.7; 2019: 12.7; 2020: 17.0",
    "Exports of services (percent of GDP): 2016: 45.5; 2017: 43.0; 2018: 44.5; 2019: 42.8; 2020: 44.7; 2021: 48.2",
    "Imports of services (percent of GDP): 2016: 28.3; 2017: 31.3; 2018: 34.9; 2019: 30.2; 2020: 31.1; 2021: 31.2",
    "External debt (percent of GDP): 2016: 125.5; 2017: 133.3; 2018: 145.7; 2019: 153.7; 2020: 158.9; 2021: 162.8",
    "Nominal GDP (millions of U.S. dollars): 2016: 3,122; 2017: 3,117; 2018: 3,128; 2019: 3,146; 2020: 3,263; 2021: 3,408",
    "Per capita GDP (U.S. dollars): 2016: 19,473; 2017: 19,478; 2018: 19,714; 2019: 19,908; 2020: 20,668; 2021: 21,587",
    "Per capita GDP (percent change): 2016: -1.8; 2017: 1.2; 2018: 1.0; 2019: 3.8; 2020: 4.4",
    "Private sector credit (percent change): 2017: 2.4; 2018: 2.5; 2019: 2.2",
    "Curaçao is part of the Kingdom of the Netherlands and does not have a separate quota.",
    "The Netherlands Antillean guilder is pegged to the U.S. dollar at NAf 1.79 = US$1.",
    "Area: 34 (km2)",
    "Population, thousand (2018): 41",
    "Percent of population below age 15 (2018): 20",
    "Literacy rate, in percent (2011): 93.8",
    "Percent of population aged 65+ (2018): 7.9",
    "Life expectancy at birth, male (year not specified in table): 74.0",
    "Infant mortality, over 1,000 live births (2010): 6.0",
    "Life expectancy at birth, female (year not specified in table): 80.6",
    "Real GDP (percent change): 2018: 0.4; 2019: -8.4; 2019/2018 entries in source vary (see original table for full year-to-year series).",
    "Primary balance excluding Trust Fund operations 1/ (percent of GDP): 2016: 2.0; 2017: -2.9; 2018: -4.0; 2019: -0.8; 2020: -2.3",
    "Current balance (Authorities' definition) 2/: 2016: -5.3; 2017: -1.9; 2018: -1.4",
    "Overall balance (percent of GDP): 2016: 1.4; 2017: -3.6; 2018: -3.8; 2019: -1.6; 2020: 1.3; 2021: 4.9",
    "Central government debt 3/ (percent of GDP): 2016: 46.0; 2017: 54.4; 2018: 51.3; 2019: 52.6; 2020: 55.3",
    "External debt (percent of GDP): 2016: 236.0; 2017: 267.1; 2018: 266.3; 2019: 265.0; 2020: 255.4; 2021: 252.8",
    "Nominal GDP (millions of U.S. dollars): 2016: 1,072; 2017: 1,014; 2018: 954; 2019: 1,009; 2020: 1,064; 2021: 1,115",
    "Per capita GDP (U.S. dollars): 2016: 27,203; 2017: 25,010; 2018: 23,495; 2019: 24,526; 2020: 25,545; 2021: 26,423",
    "Per capita GDP (percent change): 2016: -8.1; 2017: -6.1; 2018: 4.2; 2019: 3.4; 2020: 0.9",
    "Sint Maarten is part of the Kingdom of the Netherlands and does not have a separate quota.",
    "1/ Excludes capital expenditure and Trust Fund-financed special projects.",
    "2/ Revenue excl. grants minus interest income, current expenditure and depreciation of fixed assets.",
    "3/ The 2016 stock is based on financial statements. Values in subsequent years are staff's estimates and are higher than under authorities' definition.",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
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    "[Policy Tracker](https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19)",
    "[Financial Assistance](https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker)",
    "[Questions & Answers](https://www.imf.org/en/About/FAQ/imf-response-to-covid-19)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
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