WILLEMSTAD - The government of Curaçao plans to take out a loan of 70.4 million guilders soon. This will have consequences for the debt position of the Curaçao government.
The debt ratio amounts to approximately 46.7 percent of the nominal gross domestic product (GDP) at the end of June 30, 2019. Compared with March 31, 2019, the debt ratio has increased by 1.4 percentage points, due to the increase in the debt arrears charged at the General Pension Fund Curaçao (APC) plus a downward adjustment of nominal economic growth.
After implementation of the intention to take out a loan of 70.4 million, the debt ratio at the end of 2019 would come to around 47.3 percent.
"The Committee for Financial Supervision (Cft) notes an increasing debt ratio, where in the context of sustainable public finances the Cft recommends an upper limit for the debt ratio of 45 percent of nominal GDP," said the Financial Supervision Board (Cft) in a letter to Minister Kenneth Gijsbertha (MAN) ) of Finance.
Curaçao's interest expense standard is currently around 119 million. Based on the available data, it is estimated that the total interest charges of the legal entities in the collective sector in 2019 amount to approximately 58 percent of the interest charge norm, which means that the interest charge norm in the Financial Supervision Act (Rft) is met.