CBCS started research on economic impact
Prudence required with increase minimum wages
Willemstad/Philipsburg - Inflation rose steeply across the monetary union reflecting a sharp increase in international oil and non-oil commodity prices. The rise in non-oil commodity prices was driven by, among other things, supply chain disruptions and soaring transport costs amid the COVID-19 pandemic, Centrale Bank van Curaçao en Sint Maarten (CBCS) president Richard Doornbosch explained in the CBCS’ second Quarterly Bulletin of 2021. Given the countries’ high dependence on imports, inflation in Curaçao and Sint Maarten is to a great extent imported. Therefore, the hike in international commodity prices is passed through into local prices and, hence, reduces purchasing power. Average consumer prices rose sharply by an estimated 3.9% in Curaçao and 4.0% in Sint Maarten. Particularly low-income households, which spend a significant share of their income on food, are affected. “The question then arises whether under the current situation minimum wages should be at least adjusted for inflation”, Doornbosch stated.