WILLEMSTAD/PHILIPSBURG — Economic activity in the monetary union continued to expand in 2025, as reported in the December 2025 Economic Bulletin of the Centrale Bank van Curaçao en Sint Maarten (CBCS), supported by strong tourism performance, ongoing investment, and moderating inflationary pressures. Realized data up to the second quarter confirm that both stay-over and cruise tourism have been key drivers of growth across the union, even as the global environment remains characterized by geopolitical tensions, global policy uncertainty, tighter financial conditions, rising trade protectionism, and restrictive immigration measures.
Robust growth while inflation eased across the monetary union in 2025 Curaçao’s economy expanded by 3.5% in 2025, driven by stronger-than-anticipated tourism performance. Higher hotel occupancy rates and increased cruise and stay-over arrivals supported activity. Investment in real estate and infrastructure also remained solid. Growth was supported by both domestic and net foreign demand. However, domestic demand expanded more slowly than previously expected because public investment fell short of budgeted amounts. Net foreign demand strengthened as exports rose sharply on the back of higher tourism earnings, although the larger import bill partly offset this gain. Inflation in Curaçao moderated to 2.4% in 2025, reflecting lower international commodity prices and easing domestic cost pressures. Fiscal performance remained stable with the current budget surplus unchanged from 2024 at 2.2% of GDP in 2025. Meanwhile, the public debt-to-GDP ratio declined from 65.5% in 2024 to 63.0% in 2025. This improvement reflected stronger nominal GDP, despite an increase in the debt stock due to additional borrowing from the Dutch state.
Sint Maarten also posted solid growth in 2025. Real GDP expanded by 3.1%, driven by stronger than-expected stay-over and cruise tourism, following the completion of the airport’s reconstruction. As in Curaçao, both domestic and net foreign demand contributed to the expansion. Public investment supported growth through upgrades to the road network, sewage systems, and prison facilities. Private demand also increased, supported by higher private investment and consumption. Inflation in Sint Maarten fell to 1.8% in 2025, largely due to lower international oil prices. Net foreign demand also supported growth, as tourism-related export earnings increased faster than non-oil merchandise imports. Sint Maarten’s fiscal position improved as the current budget balance moved into a surplus of 1.1% of GDP. The public debt-to GDP ratio declined from 42.1% in 2024 to 41.2% in 2025 due to higher nominal GDP, although additional borrowing from the Dutch State moderated the improvement.
Growth momentum to carry over to the medium term
Looking ahead, economic growth in both Curaçao and Sint Maarten is expected to slow gradually and move toward more sustainable medium-term rates. Real GDP growth is projected at 2.4% in 2026 in both countries. Growth is then expected to ease to around 2.0% by 2029 as tourism growth saturates and global demand slows, while post-reconstruction effects in Sint Maarten gradually fade. Inflation is also expected to moderate to 2.1% in Curaçao and remain close to 1.8% in Sint Maarten. By 2029, inflation is expected to converge to about 2.0% in Curaçao and 1.6% in Sint Maarten, broadly in line with developments in key trading partners. Fiscal positions are projected to strengthen over the forecast horizon. Current budget surpluses are expected to be maintained in both countries. Debt-to-GDP ratios are projected to decline, reaching 60.5% in Curaçao and 40.5% in Sint Maarten by 2029. This decline reflects nominal GDP growth that is expected to outpace the increase in public borrowing required to finance ongoing investment programs.
Regional tensions shape risk dynamics
The balance of risks to the outlook for Curaçao and Sint Maarten remains tilted to the downside, dominated by external factors. The most prominent risk arises from tensions between the United States and Venezuela. Further military escalation could increase shipping and insurance costs, disrupt trade routes, and undermine the Caribbean’s image as a safe travel destination, thereby hurting tourism and foreign exchange earnings. Curaçao, given its geographical proximity to Venezuela, is particularly exposed to a potential increase in migration flows, which could strain public services and fiscal resources.
Other geopolitical conflicts also weigh on the outlook. The war in Ukraine and tensions in the Middle East could once again disturb energy markets and global trade. While the Gaza peace plan has eased immediate pressure on oil and shipping, the ceasefire remains fragile. Renewed supply disruptions and higher freight costs could increase commodity prices, pushing up import prices and inflation in Curaçao and Sint Maarten.
Global trade remains vulnerable to policy uncertainty and protectionist measures. Despite the smaller-than-expected 2025 tariff shock, unresolved trade agreements and legal challenges in the United States could raise import costs and weaken foreign direct investment. A delayed easing of U.S. monetary policy could keep global financial conditions tight.
Domestically, climate-related shocks, delays in executing multi-annual public investment programs, unresolved AML/CFT deficiencies, and the growing fiscal pressures associated with health care and social insurance systems continue to pose challenges that could weigh on medium-term growth and stability in both countries.
The complete text of the December 2025 Economic Bulletin is available on the CBCS website.
