WILLEMSTAD/PHILIPSBURG:— Due to the great damage that Hurricane Irma has done on St. Maarten when she hit the island on 5 and 6 September 2017, the Central Bank of Curaçao and Sint Maarten on the basis of preliminary estimates predict that the Sint Maarten’s economy will shrink in 2017. In addition, more shrinkage is expected for 2018. The powerful category 5 hurricane destroyed homes, infrastructure and commercial and government buildings. Compared with the damage that occurred 22 years ago by Hurricane Luis, Hurricane Irma caused greater damage to vital tourist facilities, including hotels and the tourism sector crucial infrastructures such as the airport and the cruise terminal. As tourism is the main, if not the only economic pillar of Sint Maarten, the devastation caused by Hurricane Irma will have a strong negative impact on the country’s economy.
However, the Bank has not been able to estimate the economic growth of Sint Maarten for the first quarter of 2017 due to a lack of data, especially data with related to inflation, housing tourism and public finances. During the first months of 2017, the government of Sint Maarten encountered problems with its IT system, which is the reason the collection and provision of economic and government statistics were delayed. In addition, due to the enormous damage that Hurricane Irma has inflicted on the infrastructure of Sint Maarten, the collection and provision of data will probably continue to delay. As a result, the Bank’s first quarterly report of 2017 does not contain an analysis of the Bank developments in the real sector and public finances of Sint Maarten.
The rate at which reconstruction will take place is crucial to the economic shrinkage in Sint Maarten to return to growth, emphasizes the Bank. Moreover, the Bank believes that if reconstruction is slow, economic shrinkage will be stronger and longer. The pace of reconstruction and restoration of Sint Maarten largely depends on how quickly the insurance claims are settled and the investments of the private and public sector to restore the production capacity of Sint Maarten. Also, the quality of reconstruction is important, the Bank proposes. Sint Maarten will provide the necessary but investments must be made for the quality of the houses, the public infrastructure and the to increase commercial real estate so that the island can better withstand future hurricanes. In this way, the disaster risk is reduced.
However, the island of Sint Maarten alone cannot bear the costs of reconstruction, according to the Bank. This makes it necessary for the Netherlands and international entities such as the European Union support the reconstruction of Sint Maarten with financial assistance and assistance. The funds made available for this purpose must be deposited in one recovery fund managed in an effective and transparent way, advises the Bank.
Once the relevant statistics are available, the Bank will analyze the economic analysis of Sint Maarten publish as an attachment of the Quarterly Bulletin on its website
Translated Press Release from the Central Bank of Curacao and St. Maarten