30 August 2016

IMF Concludes Review of Curacao, Sint Maarten economies

The two autonomous countries share the Caribbean Guilder currency, have "high level of development, good infrastructure, and relatively low public debt." according to the IMF.

IMF Press Release

On July 27, 2016, the Executive Board of the International Monetary Fund (IMF) concluded the 2016 Article IV Consultation discussions with Curaçao and Sint Maarten, two autonomous countries within the Kingdom of the Netherlands, and considered and endorsed the staff appraisal without a meeting.1,2 

The currency union of Curaçao and Sint Maarten has important strengths, including a high level of development, good infrastructure, and relatively low public debt, however, preserving these going forward will require surmounting some critical challenges. 

GDP per capita is already at high-income country levels, but growth is lackluster and unemployment levels are high. The fiscal situation remains relatively stable, following the debt relief in 2010, but progress on necessary fiscal and structural reforms has been slow. For several years now, both countries have experienced stagnant growth, trailing behind regional peers. 

Curaçao experienced modest growth in 2015 of 0.1 percent, reflecting a turnaround from the contraction of 1.1 percent in 2014. Growth in Curaçao mainly reflected an increase in investment (both public and private), driven largely by the construction of the new hospital and the upgrade of road infrastructure. 

Meanwhile, the economy of Sint Maarten expanded by 0.5 percent in 2015, a slowdown compared to the 1.5 percent recorded in 2014. The expansion in Sint Maarten’s GDP mainly reflected an increase in stay-over tourist arrivals, though at a slower pace than in 2014. With the exception of the recent expansion project at the Princess Juliana International Airport, there were no major private investment in 2015, underscoring the need to boost investor confidence. 1 



Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. 

2 Article IV consultations are concluded without a Board meeting when the following conditions apply: (i) there are no acute or significant risks, or general policy issues requiring Board discussion; (ii) policies or circumstances are unlikely to have significant regional or global impact; (iii) in the event a parallel program review is being completed, it is also being completed on a lapse-of-time basis; and (iv) the use of Fund resources is not under discussion or anticipated. 

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