CBCS Economic Bulletin warns St. Maarten is growing, but the next shocks could come fast

GREAT BAY--St. Maarten’s economy kept expanding in 2025, powered by tourism and a rebound in related sectors now that airport reconstruction is complete, but the Centrale Bank van Curaçao en Sint Maarten (CBCS) makes it clear that the island’s progress sits inside a riskier regional and global moment. The Bank’s December 2025 Economic Bulletin, which uses data available up to October 30, 2025, projects that growth will cool from today’s pace into a more “normal” rate in 2026 and beyond, even as public investment, private real estate activity, and tourism remain the main engines.

The big picture for St. Maarten, growth stays positive but slows

CBCS estimates St. Maarten’s real GDP grew 3.1% in 2025, an upward revision from its prior outlook, largely because both cruise and stay-over tourism performed better than expected, supported by added capacity after the airport rebuild.

For 2026, CBCS expects growth to moderate to 2.4%, then trend toward about 2.0% a year over the medium term as the post-reconstruction rebound fades and tourism-driven growth becomes more incremental.

What that means in practice is that 2025 is still being treated like a “momentum year,” while 2026 is framed as the start of a steadier phase, where execution and resilience matter as much as arrivals.

Tourism is still the spine of the economy, and it is lifting more than hotels

CBCS ties the 2025 performance directly to tourism and the sectors that move with it. On the production side, growth is linked primarily to increased activity in accommodation and food services, plus transport, storage, and communications, with knock-on gains in real estate, construction, and wholesale and retail trade.

The report also gives a snapshot of how this showed up in exports during the second quarter of 2025: foreign exchange revenues from stay-over tourism rose 3.7%, and foreign exchange revenues from cruise tourism grew 13.9%, consistent with higher visitor counts in both segments.

That mix matters for St. Maarten because cruise-driven gains tend to show up quickly in port and auxiliary services, while stay-over strength typically spreads deeper across jobs, rentals, restaurants, taxis, and retail.

Inflation eased sharply, but the “imported price” problem never goes away

After inflation accelerated in 2024, CBCS says price pressures decelerated to 1.8% in 2025 and are projected to remain around 1.8% in 2026, with inflation hovering near 1.6% over the medium term. The easing is linked to lower international oil prices and moderation in U.S. inflation, while CBCS also notes that U.S. price changes tend to pass through to St. Maarten with a lag.

For residents, lower inflation is relief, but CBCS’s framing still points to a familiar vulnerability: St. Maarten’s cost of living is highly exposed to shipping costs, fuel dynamics, and external disruptions, even in years when local demand is strong.

Jobs, the unemployment rate is projected to keep improving

CBCS projects St. Maarten’s unemployment rate drops to 7.6% in 2025, improves to 7.4% in 2026, and trends lower over time, with an average around 6.8% between 2026 and 2029.

This is a “growth supports jobs” story, but it is also a reminder that St. Maarten’s labor market is tightly linked to tourism cycles, construction cycles, and the pace of both public and private investment.

Government finances improved, helped by stronger revenues and tougher collection

On the fiscal side, CBCS estimates St. Maarten recorded a current budget surplus of 1.1% of GDP in 2025, moving from a balanced position in 2024. CBCS attributes the improvement mainly to higher revenues, including stronger turnover, profit, and wage tax proceeds, supported by economic growth and tax-collection measures connected to the Country Package, such as cleaning up data files, addressing backlogs, and speeding up collection of overdue payments.

The overall budget balance also improved, with the overall deficit narrowing to 0.8% of GDP in 2025 (from 1.3% in 2024), even as capital expenditures rose with projects tied to a new prison, a mental health facility, and road infrastructure maintenance.

For 2026, CBCS expects the current surplus to ease to 0.9% of GDP, while the overall deficit widens to 1.1% of GDP, largely because capital spending is projected to rise in line with the government’s multi-year investment agenda.

Debt ratio falls, but borrowing still rises, the denominator is doing a lot of work

CBCS estimates St. Maarten’s debt-to-GDP ratio declined to 41.2% in 2025, driven “solely” by higher nominal GDP, even though the debt stock increased due to additional borrowing. It also notes less-than-expected borrowing from the Dutch State to finance capital expenditures contributed to the 2025 estimate.

For 2026, the debt-to-GDP ratio is projected at 40.9%, edging toward 40.5% by 2029, again because nominal GDP growth is expected to outpace growth in the debt stock.

The practical takeaway is that “debt ratio improving” is not the same as “debt pressures gone,” especially if the island faces a shock that slows nominal growth or forces emergency spending.

External pressures, why the next crisis may not start on the island

CBCS repeatedly flags that the balance of risks is tilted to the downside, and several of those risks hit St. Maarten through tourism confidence, shipping costs, and investment decisions.

Key risks highlighted in the bulletin include:

• Extreme weather events: CBCS says the risk is more pronounced for St. Maarten because it sits in the hurricane belt, where storm frequency and intensity have increased in recent years, with direct damage and indirect inflation risks through food supply shocks.

• Delays in executing public investments: both countries are behind expectations mid-year, and further delays could postpone private investment, especially in hotels and real estate, which matters directly for St. Maarten’s growth path.

• AML/CFT deficiencies: CBCS warns that failure to address strategic shortcomings could raise compliance costs and disrupt cross-border transactions, which would be especially disruptive for a tourism and services economy.

• Regional geopolitical tension: the bulletin’s risk section and related analysis point to escalating U.S.–Venezuela tensions as a channel that could hurt travel sentiment, increase shipping and insurance costs, and weaken investor confidence across the region, even without direct trade ties.

For St. Maarten, this is the quiet warning underneath the upbeat topline numbers: the island’s main success drivers, tourism flows, imported inputs, and externally financed investment, are the same channels through which outside shocks arrive.

What to watch in 2026, the difference between “steady growth” and “stall”

CBCS’s outlook implies that St. Maarten’s 2026 performance hinges less on a single mega-project and more on whether several moving parts stay aligned:

Tourism capacity needs to translate into sustained arrivals and spending, public investment needs to move from budget lines into completed work, and private hotel and real estate projects need financing conditions that do not tighten unexpectedly.

If those hold, the forecast points to continued growth with relatively contained inflation. If they break, the downside risks outlined by CBCS are exactly the kind that can turn a 2–3% growth year into a flat one quickly.

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