The economy decreased by 2.2 percent in 2018
WILLEMSTAD – In 2018, the growth rate of gross domestic product (GDP) came to a further decline. After successively -1.0 percent and -1.7 percent in 2016 and 2017, the decline in gross domestic product (GDP) growth continued in 2018 by 2.2 percent.
The first preliminary calculations regarding the economic development in Curaçao relate to the real developments, that is, they have been corrected for price developments. This is evident from the data that the Central Bureau of Statistics Curaçao (CBS) announced.
The economic growth is calculated based on the volume growth in the production process and the economic development. This data is still provisional, since it is not yet possible to have complete data from all sectors. The economic indicators are statistics that indicate the current status of a country’s economy, depending on a particular area of the economy (such as industry, employment, prices, etc.).
On the labor market it appears that there was an unemployment rate of 13.4 percent, which quantity was reduced compared to 2017, youth unemployment of 29.3 percent. This was also due to low economic activity according to the business survey and an increase in consumer prices, bringing inflation to 2.6 percent in 2018.
The economic development
The year 2018 started with regional tensions, closing of borders between countries, escalating trade tensions, and stricter financial conditions, all of which had an impact on our economy. The real growth of the economic activities mainly took place in the sectors: “Horeca” (8.2%), Private Education “(4.5%),” Business services “(1.6%),” Financial Mediation ” (0.9%), and “Healthcare” (0.7%). The other branches of industry show a decrease in 2018. The following is an overview of the economic activities in 2018:
The added value of Agriculture, fisheries and mining continued to fall by 5.3 percent (in 2018), in the previous year there was a decrease of more or less 2 percent.
The continuing weakness of the industrial activities continued into a 14.3 percent decrease in the Industry sector. The cause is mainly in the oil refining activities that affect the entire industry and other production activities of companies in 2018.
The Non-Residential Industry shows a shrinkage of almost 1.7 percent in 2018. In this industry, an increase in the volume activity of water was observed, but there was a decrease in electricity combined with the increase in the price component for both water and electricity in 2018 a decline in this industry.
The Construction activities continued to play an important role in the economic growth of Curaçao. Construction was in a declining situation of 7.3 percent after a slight improvement in the previous year (0.1%). This negative performance can be attributed to the decreases in mortgage loans and a decrease in construction activities.
The activities in the Trade decreased by 0.8 percent, although less so than in the previous year (-4.6%). The decrease was caused by a decrease in goods imports and the various trading activities of the companies.
The Horeca or the tourism sector has been on the rise since 2018. The activities in the hotels and restaurants sector have increased compared to 2017. A global overview of the number of overnight stays of tourists from the various tourist regions shows that there was an all-round progress except for South America. Tourist overnight stays from South America continued to decline by 4 percent compared to 2017 (-17%). Of the region, North America and the Caribbean made the most progress with 18 and 14 percent respectively. Europe again shows a growth of 8 percent in overnight stays, previously it was 3 percent. Overnight stays from other areas increased by 13 percent. Both the total number of overnight stays of tourists increased by 8 percent and the total number of visitors increased by 14 percent in 2018. All things considered, these developments lead to higher added value in the hotels and restaurants sector of more than 8 percent.
The trend in the Transport & Communications industry showed a continuing decline of more than 1 percent in economic activities compared to previous years. Transport activities in the port and airport have generally improved. The port activities were mainly hit hard by the tankers, while other vessels piloted in have improved in numbers. The cruise calls and the number of passengers also increased in 2018. The air transport activities also increased in the number of passengers together with the number of air freight rates, but there were fewer landings. A decrease was also observed in the communication sector in 2018.
A growth was observed in the “Financial intermediation” industry (0.9%). This increase is attributed to, among other things, the increase in loans, international business and financial services and other local commercial banking activities.
The Business services, which include real estate, rental and business activities, experienced a moderate increase of 1.6 percent in 2018 compared to the decrease in 2017 (-5.4%).
The government’s contribution to economic development was less compared to 2017. A decrease of 0.4 percent was observed. The provisional added value of government activities increased in 2018, mainly due to price developments.
In the Education sector, progress was shown in 2018. The added value of private education had risen by 4.5 percent.
In Healthcare there was a slight growth of 0.7 percent in 2018, compared to the slight negative development in 2017. It is mainly due to more workers and an increase in activities in this industry.
The global economy
In 2018 the growth of the world economy was 3.6 percent, this is in accordance with the “World Economic Outlook” of the International Monetary Fund. In 2018, economic development remained almost unchanged compared to 2017 (3.8%).
The developed economies indicate an average growth slowdown of 2.2 percent in 2018, in 2017 it was 2.3 percent. Growth was mainly influenced by, among other things, the United States (2.9%), the Eurozone (1.8%), of which the Netherlands experienced an increase in its economy of 2.5 percent. Other countries such as the United Kingdom (1.4%), Canada (1.8%), and Japan (0.8%) all had economic growth in 2018.
The emerging and development economies are continuing with a growth of 4.5 percent in 2018, almost the same percentage compared to 2017 (4.8%). Asia’s economies had grown overall by 6.4 percent.
In 2018, the economic development of South America shows an average growth of 0.4 percent, while Central America indicated an increase of 2.7 percent. The Caribbean region had real growth of an average of 4.7 percent in 2018 (2.7% in 2017). The economic development in Curaçao unfortunately lagged behind in 2018, compared to the average progress of the Caribbean region and the rest of the world.