Economic growth slows down in 2023

PHILIPSBURG – Real growth of St. Maarten’s Gross Domestic Product will drop from 9.8 percent in 2022 to 3.2 percent this year, the Central Bank of Curacao and St. Maarten (CBCS) reports in its Monetary Policy Report of June 2023.

The growth forecast is up 0.9 percent from the outlook the bank published in March. This is primarily due to a more positive contribution of public demand to economic growth, the report states. Public demand represents government consumption and investment. The numbers the bank used for its projection stem from St. Maarten’s approved 2023 budget.

Inflation will reach 3.7 percent this year, 0.2 percent higher than an earlier publication. This increase reflects “a delayed pass-through of the increase in international commodity prices, notably through the US inflation, in St. Maarten’s domestic prices.”

Another factor contributing to economic growth is the increase in private demand. This, in turn, is mainly due to an increase in private investments in large commercial and private projects.

Because of the rising inflation, the bank expects private consumption to remain muted. On the other hand, public demand will increase due to a rise in government consumption and investment.

Real economic growth will slow down to 2.8 percent in 2024 when large investment projects such as airport reconstruction will reach their final phases.

Private and public demand is projected to increase in 2024. Inflation will ease to 2.2 percent. This is consistent with the projected decline in US inflation and a further expected decrease in international oil prices.