Address structural deficits in the balance of payments
Tourism remains most important pillar
WILLEMSTAD/PHILIPSBURG – “Soaring international commodity prices underscore the vulnerabilities on the balance of payments of the monetary union,” cautioned Centrale Bank van Curaçao en Sint Maarten (CBCS) president Richard Doornbosch in the Bank’s June 2022 Economic Bulletin. “As small and open economies, Curaçao and Sint Maarten are very dependent on imports. Consequently, increases in import prices, all other things being equal, will result in a higher deficit on the current account of the balance of payments. At approximately 17% of GDP over the past decade, the deficit on the current account of the balance of payments is relatively high,” he added. Despite a structural deficit on the current account of the balance of payments, gross official reserves have increased considerably due mainly to external financing, including the government borrowing from the Netherlands. “Hence, the balance of payments suffers two structural weaknesses: first, a high import bill that is not covered by exports, and second, a worsening international investment position,” Doornbosch pointed out.