CBCS: St. Maarten’s economy on solid growth path with fiscal surplus and lower inflation

GREAT BAY--The Centrale Bank van Curaçao en Sint Maarten (CBCS) reports that Sint Maarten’s economy continues to expand in 2025, supported by strong tourism inflows, new commercial and residential projects, and a stable fiscal outlook. The Bank’s September Economic Bulletin projects real GDP growth of 2.8% this year, following 3.0% in 2024, before moderating to 2.4% in 2026. The upward revision from the June outlook reflects stronger-than-expected tourism performance and ongoing private investment in construction and infrastructure.

Inflation in Sint Maarten is forecast to decline sharply, from 3.6% in 2024 to 2.0% in both 2025 and 2026. The drop is largely attributed to lower global oil prices and more favorable international conditions, easing pressure on household purchasing power. The Bulletin also notes that private consumption is recovering, with increased imports of non-oil merchandise reflecting stronger domestic demand.

On the fiscal front, Sint Maarten is set to record a current budget surplus of 1.0% of GDP in 2025, after posting a balanced budget in 2024. The improvement is driven by higher tax proceeds from wage, profit, and turnover taxes, supported by stronger economic activity and enhanced tax compliance. Government expenditures are also rising, particularly on goods and services linked to the Program Effectiveness and Advancing Resilience (SPEAR), as well as wage adjustments for civil servants. Despite these increases, revenues are projected to outpace spending, keeping the fiscal balance positive.

The country’s debt-to-GDP ratio is projected to rise temporarily to 42.4% in 2025, up from 42.1% in 2024, due to foreign borrowing from the Netherlands to finance capital investments. However, the ratio is expected to ease back to 41.8% in 2026 as nominal GDP growth offsets higher debt levels. In the first quarter of 2025, the debt ratio had already dropped to 40.0%, reflecting strong revenues and lower-than-anticipated expenditures.

The CBCS also highlights continued risks to Sint Maarten’s outlook, including geopolitical tensions, trade disruptions, and global energy price volatility. Nevertheless, tourism-led growth, improved fiscal management, and declining inflation are expected to provide the country with a more stable macroeconomic environment heading into 2026.

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