Representatives of the CBCS during Monday’s meeting of the Central Committee of Parliament.
PHILIPSBURG–St. Maarten’s economy would have performed better if the reconstruction funds from the Dutch Government had been released at a better pace.
This is based on a growth scenario assessment done by the Central Bank for Curaçao and St. Maarten (CBCS) and presented to Members of Parliament (MPs) during a meeting of the Central Committee of Parliament on Monday. Part of the meeting was open to the public and part of the meeting was held behind closed doors as it involved more sensitive information.
The bank presented an impact analysis of the assistance from the Netherlands to the economy of St. Maarten during the public part of the meeting. The actual situation shows that the economy contracted in 2017 and 2018 began to rebound in 2019 and is projected to taper off in 2020 and remain at one flat level until around 2025.
CBCS Interim President Jose Jardim said the average economic growth for St. Maarten in the future is expected to be about two per cent. “This is important because it might seem as if the economic growth is stronger than in the past, but keep in mind that the economy is still recovering and it has still not recovered to pre-hurricane levels.”
An analysis on how the economy would have performed if the remaining resources from the reconstruction funds are released, around 84 million annually, shows that this would aid the St. Maarten economy to grow much faster, Jardim said.
In assessing what would have happened if St. Maarten had not received any assistance from the Netherlands, CBCS said the contraction to the economy in 2017 and 2018 would have been “much stronger” and economic growth would have been less robust in 2019 and growth would have eventually converged to around 2 per cent, but it would have still been lower compared to receiving assistance.
According to CBCS’ assessment of the performance of the economy if the reconstruction funds had been released (at a faster pace), would have helped the economy grow in 2018 and the contraction experienced in that year would have been smaller. Also, in this scenario, in 2019, the economic growth would have been stronger and economy would have been able to grow at a faster pace.
“The expectation of CBCS if nothing changes, is that in 2022 pre-hurricane (Irma) levels will be recovered,” Jardim said, noting that if the reconstruction funds had been released the country would have achieved its pre-hurricane levels since last year.
CBCS emphasized the importance of financial aid materializing. “Financial aid should be kept not to a promise, but it has to materialize.”
MPs during Monday’s meeting.