WILLEMSTAD - Curaçao has an open economy and is in many ways dependent on developments elsewhere in the world. After an estimated 4.4 percent contraction in 2020 due to the pandemic, the global economy is projected to grow by 5.2 percent in 2021.
The expected growth is mainly driven by an increase in private consumption and a slight increase in private investment. World trade will also grow on the back of increased demand, while inflation will gradually increase consistent with the expected increase in economic activity. However, the recovery of the global economy to pre-pandemic levels remains sensitive to setbacks.
Economic activities in two of the main trading partners of the monetary union of Curaçao and Sint Maarten - the United States (US) and the Netherlands - are expected to recover in 2021. Real GDP growth of 3.1 percent is projected for the US, driven by an increase in domestic demand moderated by a decline in net foreign demand.
The Dutch economy is expected to grow by 4 percent thanks to an increase in all GDP components, but moderated by the second wave of the pandemic and new restrictions on physical contact that will have a negative effect on various sectors of the economy. As a result, total output and employment remain below pre-pandemic levels.
"Venezuela, which is an important trading partner of Curaçao, is expected to remain in a deep economic crisis," says the Central Bank of Curaçao and St. Maarten.