GREAT BAY--St. Maarten’s government finances are showing stronger headline numbers in 2026, but the Central Bank’s latest Economic Bulletin reveals an important distinction beneath those figures: the country’s budget surplus has improved and its debt-to-GDP ratio is falling, while the actual amount of public debt and government arrears are still increasing.
During the first quarter of 2026, government recorded a current budget surplus of Cg 38.6 million, slightly higher than the Cg 38.0 million recorded during the same period of 2025.
The result was also better than the Cg 28.8 million initially projected for the quarter. CBCS reported that revenues were Cg 4.5 million higher than expected while current expenditures came in Cg 5.3 million below budget. The Central Bank notes that its first-quarter comparison used the first-quarter 2025 budget because the actual 2026 budget was not yet available for the analysis.
Government revenues increased by Cg 8.8 million compared with the first quarter of 2025, while current spending increased Cg 8.2 million.
At first glance, tax receipts also showed a large increase. CBCS recorded a Cg 29.8 million increase in tax revenues, including increases of Cg 16.4 million in profit tax, Cg 9.4 million in turnover tax and Cg 3 million in wage tax.
The Bank, however, cautioned that much of that increase resulted from accounting reclassification rather than entirely new tax collections. Revenue that had previously been placed in another category because of unclear descriptions on bank statements was subsequently identified as tax revenue and moved into the appropriate tax categories.
License fee income also declined by Cg 1.5 million, with CBCS pointing in part to backlogs in invoicing business and directors’ licenses.
Government spending increased during the quarter, particularly personnel costs. Wages and salaries rose by Cg 6.2 million due to the filling of vacancies, periodic salary increases and higher costs associated with civil servants’ health and sickness insurance. Spending on goods and services increased Cg 1.4 million, while social security spending rose Cg 0.8 million.
The public debt numbers require similar attention to the distinction between the headline ratio and the actual debt owed.
St. Maarten’s outstanding public debt increased by Cg 1.8 million during the first quarter to Cg 1.2713 billion. CBCS said the increase came entirely from domestic debt, mainly unpaid cost-of-living adjustment invoices owed to pension fund APS. Foreign debt remained unchanged at Cg 1.1267 billion during the quarter.
Despite the increase in the debt itself, the debt-to-GDP ratio fell by 2.2 percentage points to 38.5 percent. The reason was growth in the size of the economy, which outpaced the increase in debt.
That same distinction appears in CBCS’ outlook for the rest of the year.
The Bank expects St. Maarten to record a current budget surplus equivalent to 1.2 percent of GDP in 2026, up from 0.7 percent in 2025. Government revenue is projected to grow by 5.9 percent, compared with a 2.7 percent increase in current expenditures.
However, the overall budget, which takes capital investment into account, is still projected to record a deficit of 0.2 percent of GDP. That is a major improvement from the 2.4 percent deficit in 2025, but CBCS says part of the improvement reflects declining capital expenditure because government investment projects have been delayed.
The public debt-to-GDP ratio is forecast to fall further to 39.2 percent for 2026, but CBCS makes clear that the decline is expected solely because nominal GDP is increasing.
Both domestic and foreign debt are expected to increase. Domestic debt is projected to rise partly because of growing arrears, while foreign debt will increase as government borrows to finance investments.
The bulletin also raises a longer-term question about St. Maarten’s tax system.
Between 2016 and 2025, wage tax accounted for an average 32.4 percent of total tax revenue and turnover tax another 28.2 percent. Together, the two sources provided more than 60 percent of government tax revenues.
Turnover tax collections have strengthened relative to GDP since the post-pandemic recovery, coinciding with stronger tax administration and compliance measures. Wage tax has behaved differently. Wage tax collections have grown more slowly than nominal GDP since 2020, although CBCS cautions that this does not by itself prove a compliance problem. Employment levels, wages and changes in the labor market could also be factors.
What CBCS cannot currently determine is how much tax St. Maarten should be collecting compared with what it actually collects.
The Bank says the country lacks sufficiently detailed and timely information to construct a reliable turnover-tax base and calculate a meaningful tax compliance gap. Without that data, government cannot yet reliably measure the difference between potential tax liabilities and actual collections.
CBCS recommends better integration of tax administration and national accounts data, continued digitalization, risk-based audits and data-matching systems. It also calls for further analysis of wage tax performance to determine whether the trend results from labor-market changes, compliance problems or other factors.
The September bulletin therefore shows improving public finances, but with qualifications that matter. St. Maarten is collecting more revenue, producing budget surpluses and growing quickly enough to reduce its debt ratio.
At the same time, public debt is not actually declining, arrears are increasing, some investment spending has been delayed, and government still lacks the data required to determine the size of its tax compliance gap.
The distinction is important: stronger fiscal ratios are one measure of improvement, but the underlying debt, investment and tax collection numbers show where further work remains.
