Central Bank warns of economic and social catastrophe if Ennia-crisis is not resolved

PHILIPSBURG – “Not finalizing a resolution strategy for Ennia could trigger a run-off of international reserves and cause a deep economic and social crisis,” the Central Bank of Curacao and St Maarten (CBCS) writes in its Economic Bulletin entitled From Swift Rebound to Steady Growth that was published in June.

The statement about Ennia is part of ten concerns about the economic future of Curacao and St. Maarten. “Risks are significant and tilted to the downside,” the report states.

Higher interest rates on international markets could result in a decline of direct foreign investments into the monetary union while triggering increased investments abroad by local institutional investors, the report states.

Supply chain disruptions as a consequence of the war in Ukraine could delay the execution of major construction projects because construction materials will become scarce and more expensive.

Natural disasters, extreme weather conditions, the question of whether a decline in international oil prices will affect local fuel prices, and higher inflation could affect disposal income and private consumption.

On the other hand, successful implementation of reforms described in the country packages could result in a higher growth path, the report states.

There is however another potential stumbling block: the outcome of the mutual evaluation by the Caribbean Financial Action Task Force (CFATF): “This could have a positive or a negative effect on the countries’ ability to continue conducting international business and transactions with minimal interference.”

Economic growth in St. Maarten could be negatively affected if delays occur in reconstruction projects, the report warns.