WILLEMSTAD – Inflation in Curaçao is not just an economic issue, but a social one that threatens to deepen inequality, according to a comprehensive working paper published by the Central Bank of Curaçao and Sint Maarten.
The study finds that while average inflation figures provide a general picture, they mask large differences between income groups. Over the period 2017–2024, the lowest income group consistently faced higher inflation than the national average, while higher-income households experienced lower inflation rates.
This gap is largely explained by spending patterns. Low-income households rely heavily on essential goods with little scope for substitution. When food or electricity prices rise, they cannot simply switch to cheaper alternatives. In contrast, higher-income households can adjust consumption, delay purchases or shift spending toward less affected categories.
The report also examines the role of government policy. While broad measures such as fuel tax exemptions and general subsidies can soften price increases, the Central Bank argues that they are less effective than targeted interventions. The study recommends focusing support on low-income households through social safety nets, targeted subsidies and wage indexation mechanisms.
In addition, the Central Bank emphasizes the importance of structural reforms. Investments in local agriculture, renewable energy and resilient infrastructure could reduce Curaçao’s dependence on imports and limit exposure to global price shocks in the long term.
Without such measures, the report warns, inflation will continue to erode purchasing power at the bottom of the income scale, increasing poverty risks and social pressure. Policymakers are urged to treat inflation not only as a macroeconomic challenge, but as a key factor in social cohesion and economic resilience .
