WILLEMSTAD – The Makutu Básiko program, under which the government sets fixed prices for essential goods, plays an important role in shielding Curaçaoan families from inflation. This is stated in the latest Economic Bulletin of the Central Bank of Curaçao and St. Maarten (CBCS). At the same time, the Bank warns that price controls may have negative effects on the economy if maintained for too long.

The principle behind Makutu Básiko is straightforward: basic necessities such as rice, milk, oil, and cleaning products are sold at capped prices to ensure that especially low-income households retain access to essentials. According to the CBCS, this policy can be effective, particularly during international price shocks, as the price ceilings help preserve the purchasing power of vulnerable families.

However, the Bank stresses that price regulation must remain a temporary and carefully managed measure. If applied too broadly or for too long, entrepreneurs lose their profit margins, which can lead to lower product quality, reduced supply, and even shortages. In extreme cases, black markets may emerge where the same goods are resold at higher prices.

In practice, Curaçao’s Makutu Básiko program has provided families with some protection against the rising costs of imported goods. Still, the CBCS underscores that it is not a structural solution. In the long term, reducing dependence on costly imports is necessary, with more investment in local food production and sustainable energy as key strategies.

The Central Bank concludes that while Makutu Básiko helps families weather difficult times, it cannot fundamentally resolve Curaçao’s inflation challenges. Broader economic reforms are required to secure lasting stability.