Published On: Wed, Jan 9th, 2013

CBCS: considerable improvement on deficit

WILLEMSTAD – The deficit in the balance of payments in 2012 of the monetary union between Curaçao and St. Maarten was expected to be over 100 million guilders, this is a considerable improvement compared to the deficit in 2011 (over 500 million guilders), according to a report from the Central Bank of Curaçao and St. Maarten (CBCS) on the economic developments in 2012 and the prospects for 2013. A further improvement is expected in 2013 and an estimated balance of payments surplus of 40 million guilders. The improvement of the deficit in 2012 on the current account in the balance of payments can be attributed to a growth in the net export of goods and services, and fewer international income transfers. “The exports exceeded the imports, especially that of tourism, the free zone and the higher foreign currency amounts due to major repairs at the refinery. The growth of import was moderated by fewer imports from the wholesale and retail business and less spending on Curaçao.”

Monetary policy

“Despite the expected surplus in the balance of payments, the deficit in the current account is approx. 25 percent of the GIP and the cover of import shows a downward tendency”, according to the report. “Therefore, the monetary policy will remain stringent but the latter doesn’t contribute toward a continual growth.”

In the past year the obligatory reserve was increased gradually and the private loans frozen up to and including August. “A structural improvement of the balance of payments and foreign currency reserves require reforms that boost the export and moderate the import growth. This requires substantial (international) investments, which can only be realized in an attractive investment climate and a stable macro-economic environment. The government’s policy is to concentrate on this in the coming years.”

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