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No. 2022-025
Work on medium-term fiscal adjustment
Balanced budget should not be at expense of recovery
WILLEMSTAD/PHILIPSBURG - When Curaçao and Sint Maarten agreed on implementing a reform package, the so-called Landspakket, with the Netherlands as a condition for liquidity support amid the COVID-19 pandemic, part of it included achieving a balanced budget by 2023. Given the poor state of the public finances in the countries, fiscal consolidation is indispensable, the Centrale Bank van Curaçao en Sint Maarten (CBCS) acknowledged in its June 2022 Economic Bulletin. “However, amid the heightened uncertainties, the question arises whether the current fiscal consolidation path is realistic. With increased inflation pressures moderating the pace of economic recovery and higher government spending required to provide targeted support to the most vulnerable in society, a balanced budget should not come at the expense of a continued recovery,” cautioned CBCS president Richard Doornbosch.