WILLEMSTAD – New U.S. import tariffs could significantly weaken the financial resilience of Curaçao and Sint Maarten, according to the latest scenario analyses from the Centrale Bank van Curaçao en Sint Maarten (CBCS). The monetary union’s import coverage ratio is projected to drop to just above the critical threshold of three months, due to rising import costs and a projected decline in tourism.
In the bank’s baseline scenario—where U.S. trade partners do not retaliate—the union’s import coverage is expected to fall from over four months in 2024 to exactly three months by 2028. Should a global trade war unfold, the buffer could erode even faster, reaching just 3.1 months within three years.
The import coverage ratio reflects how long an economy can continue to finance imports with its own foreign currency reserves. A minimum of three months is internationally recognized as the benchmark for a healthy financial buffer.
The CBCS also reports a worsening of the current account deficit. In 2025, the deficit is projected to rise to over 14% of gross domestic product, compared to just over 13% in the baseline scenario. In subsequent years, the deficit is expected to remain above 10%.
The shrinking foreign exchange reserves are primarily attributed to higher import costs and a predicted drop in tourist spending, particularly from the United States. This combination results in lower inflows of foreign currency, while expenses continue to rise.
To reverse the trend, the CBCS stresses the need for urgent policy interventions. These include boosting exports and attracting tourists from regions beyond the United States. Increasing local production is also seen as a key strategy to reduce dependency on imports.
