Research Update: Curacao 'A-/A-2' Ratings Affirmed; Outlook Remains Stable

Curacao enjoys a stable democratic parliamentary political system within the Kingdom of the Netherlands. Curacao also has a strong government balance sheet, somewhat offset by limited monetary and exchange rate flexibility and low per capita GDP growth. We are affirming our 'A-/A-2' long- and short-term foreign and local currency sovereign credit ratings on Curacao. The stable outlook reflects our expectation of small fiscal surpluses, large current account deficits, and continuity in economic policy over the coming three to four years. On March 13, 2015, Standard&Poor's Ratings Services affirmed its 'A-/A-2' long- and short-term foreign and local currency sovereign credit ratings on the government of Curacao. The outlook remains stable. We also affirmed our 'A-' transfer and convertibility assessment.

...Gross external financing needs/CARs plus usable reserves (%) 142.5 139.3 164.7 141.0 144.1 140.3 144.8 140.6 144.0 146.8 146.7 Current account balance/GDP (%) (26.4) (16.7) (30.8) (27.1) (27.8) (20.9) (14.9) (13.3) (12.9) (13.3) (12.6) Current account balance/CARs (%) (31.2) (20.3) (42.7) (32.7) (32.7) (25.6) (17.6) (14.8) (14.2) (14.6) (13.7) Narrow net external debt/CARs (%) (42.9) (83.2) (92.7) (79.0) (75.1) (71.8) (84.3) (71.2) (71.2) (71.1) (71.1) Net external liabilities/CARs (%) (29.3) (68.6) (74.7) (60.5) (52.0) (42.4) (49.9) (24.8) (12.0) 0.7 11.9 Note: Other depository corporations (dc) are financial corporations (other than the central bank) whose liabilities are included in the national definition of broad money. Gross external financing needs are defined as current account payments plus short-term external debt at the end of the prior year plus nonresident deposits at the end of the prior year plus long-term external debt maturing within the year. Narrow net external debt is...

Research Update