Presentation of the annual report 2012

CentraleBankvanCuraçaoenSintMaartenCentraleBankvanCuraçaoenSintMaartenCentraleBankvanCuraçaoenSintMaarten
July 23, 2013
Annual Report 2012Annual Report 2012

July 23, 2013 2
Outline presentationOutline presentation
• Developments in:
– Real sector
– Public sector
– External sector
– Monetary and financial sector
• Outlook for 2013 & 2014
• Benchmarking in the Caribbean

July 23, 2013 3
Real sectorReal sector

Developments in the
monetary union
Developments in the
monetary union
July 23, 2013 4
2011 2012
Current account balance (in mln NAf.) -1,466.5 -1,382.1
Change in gross foreign reserves of the central
bank (in mln NAf)* -48.4 277.4
Change in money supply (%) 1.3 1.8
Change private loans (%) 5.4 4.8
Curaçao 8.9 8.6
Sint Maarten -2.4 -4.7
GDP growth (%)
Curaçao 0.6 -0.1
Sint Maarten -1.5 1.5
Inflation (%)
Curaçao 2.3 3.2
Sint Maarten 4.6 4.0
*- sign means an increase

July 23, 2013 5
Macro-economic key figures: a
comparison
Macro-economic key figures: a
comparison
5.3%4.4%2.5%2.3%-1.0%1.0%
The
Netherlands
5.9%6.5%21.1%26.1%5.5%4.2%Venezuela
7.8%8.5%2.1%3.2%2.2%1.8%
United
States
9.6%8.9%0.6%4.4%-1.2%3.7%Aruba
201220112012201120122011
Unemployment rateConsumer pricesReal GDP

July 23, 2013 6
Main developments Curaçao in 2012Main developments Curaçao in 2012
• Economic contraction of 0.1%.
• Inflation rate increased to 3.2% due mainly
to the increase in the sales tax rate from
5.0% to 6.0% in 2012.

CentraleBankvanCuraçaoenSintMaartenCentraleBankvanCuraçaoenSintMaartenCentraleBankvanCuraçaoenSintMaarten Sectoral performance in
Curaçao in 2012 (1)
Sectoral performance in
• Decline in the manufacturing sector
– Decline in output refinery.
– Decline in ship repair.
• Decline in construction sector
– Lack of major construction projects.
• Growth slowed in wholesale & retail trade sector
– Decline in domestic demand.
– Increase in foreign demand (tourists and free zone).
July 23, 2013 7

• Increase in restaurants & hotels sector
– Increase stay-over tourism.
– Growth cruise tourism.
• Increase in transport, storage & communication sector
– More passengers handled.
– More ships piloted into the port, more cargo movements, and
more oil storage activities.
July 23, 2013 8

Economic development CuraçaoEconomic development Curaçao
July 23, 2013 9
0.6%
-0.1%
2.3%
3.2%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
2008 2009 2010 2011 2012
Real GDP Inflation

Curaçao GDP by expenditureCuraçao GDP by expenditure
July 23, 2013 10
Real percentage changes 2011 2012
Domestic expenditure, ofDomestic expenditure, of
which:which: --0.20.2 --1.01.0
Private sector 1.8 -0.3
-Consumption 1.4 -0.5
- Investment 0.4 0.2
Public sector -2.0 -0.7
-Consumption -2.0 -0.1
-Investment 0.0 -0.6
Foreign net expenditure, ofForeign net expenditure, of
which:which: 2.02.0 0.70.7
-Exports of G&S 8.6 3.8
-Imports of G&S 6.6 3.0
Real GDP by expenditureReal GDP by expenditure 0.60.6 --0.10.1
Source: Estimates by the Central Bank of Curaçao and Sint Maarten.
*Expenditure categories data are weighted contributors to GDP growth

CentraleBankvanCuraçaoenSintMaartenCentraleBankvanCuraçaoenSintMaartenCentraleBankvanCuraçaoenSintMaarten Main economic developments
Sint Maarten in 2012
Main economic developments
Sint Maarten in 2012
• Real GDP growth of 1.5%.
• Inflation rate decelerated to 4.0% owing
largely to a slowdown in the growth in
international oil prices.
11

Sint Maarten in 2012 (1)
• Increase in restaurants & hotels sector
– Increase stay-over tourism.
– Growth cruise tourism, albeit at slower pace compared to
2011.
• Increase in transport, storage & communication sector
– More passengers handled.
– More ships piloted into the port and more cargo movements.
• Growth in wholesale & retail trade sector
– More tourism spending.
– Less domestic spending.
July 23, 2013 12

• Growth in utilities sector
• Increased production and consumption of water and
electricity.
• Growth in financial services sector
• Increase in net interest income of the domestic banks.
• Growth remained flat in the construction sector
• Decline in the manufacturing sector
• Less ship repair activities on yachts.
July 23, 2013 13

July 23, 2013 14
Economic development
Sint Maarten
Economic development
Sint Maarten
-1.5%
1.5%
4.6%
4.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
2008 2009 2010* 2011* 2012*
Real GDP Inflation
*Estimate CBCS

July 23, 2013 15
Public sectorPublic sector

July 23, 2013 16
Main developments CuraçaoMain developments Curaçao
• Third consecutive government budget
deficit.
• Negative yet improved primary balance.
• In July 2012, the government was instructed
by the Kingdom Council of Ministers to
balance its 2012 budget and multi-annual
projections.
• The instruction was removed for the most
part early in April 2013.

July 23, 2013 17
Budget development CuraçaoBudget development Curaçao
-110.3
0
-500
0
500
1,000
1,500
2,000
2,500
3,000
2009 2010 2011 2012 2013*
NAf.mln
Budget balance
* 2013 Government budget

July 23, 2013 18
-110.3
0
1,717 1,765 1,610
-500
0
500
1,000
1,500
2,000
2,500
3,000
2009 2010 2011 2012 2013*
NAf.mln
Budget balance Total expenditures

July 23, 2013 19
-110.3
0
1,717 1,765 1,610
1,564 1,655 1,610
-500
0
500
1,000
1,500
2,000
2,500
3,000
2009 2010 2011 2012 2013*
NAf.mln
Budget balance Total expenditures Total revenues

July 23, 2013 20
Total public debt CuraçaoTotal public debt Curaçao
2,208
1,667 1,667
5,439.3 5,607.9
0
1,000
2,000
3,000
4,000
5,000
6,000
2010 2011 2012
NAfmln
Total public debt Outstanding government bonds GDP

July 23, 2013 21
Total public debt-to-GDP ratio
Curaçao
Curaçao
41%
39%
0%
10%
20%
30%
40%
50%
60%
2009 2010 2011 2012*

July 23, 2013 22
Interest burden CuraçaoInterest burden Curaçao
-154 -110
0
50 50 52
-200
0
200
400
600
800
1,000
2009 2010 2011 2012 2013*
Budget balance Interest payments

July 23, 2013 23
Main developments Sint MaartenMain developments Sint Maarten
• Preliminary budget surplus.
• Positive and improved primary balance.
• Ongoing focus on establishing the necessary
institutions to become a full-fledged
government administration.
• However, financial constraints form a barrier
in this development.
• The 2013 budget has not been signed into
law yet.

July 23, 2013 24
Interest, debt and GDP Sint MaartenInterest, debt and GDP Sint Maarten
12 11
354 353
1,487.8
1,569.6
0
250
500
750
1,000
1,250
1,500
1,750
2009 2010 2011 2012
NAfmln
Interest Total public debt GDP

July 23, 2013 25
Sint Maarten
Sint Maarten
24% 22%
0%
5%
10%
15%
20%
25%
30%
2009 2010 2011 2012

July 23, 2013 26
External sectorExternal sector

July 23, 2013 27
Main developmentsMain developments
• Current account improved in 2012 due to:
– improvement in the services balance;
– mitigated by deterioration in the trade, current transfers and
income balances.
• Further decline in net capital transfers.
• Increase in external financing moderated due to:
– substantial smaller increase in loans and credits balance.
• Developments resulted in balance of payments deficit
and drop in gross foreign exchange reserves.

July 23, 2013 28
Balance of payments
(transaction basis, NAf mln)
Balance of payments
(transaction basis, NAf mln)
277.4-48.4-27.6-538.9-371.6Change in reserves
573.7182.2-1,529.3-188.7-126.6Portfolio investments
261.61,076.21,456.0786.71,210.2Loans and credits
112.188.4228.6196.4449.0Direct investments
947.41,346.9155.4794.41,532.6External financing
69.8123.11,200.8200.6244.8Capital account
-1,382.1-1,466.5-1,427.8-608.6-1,513.9Current account
20122011201020092008

July 23, 2013 29
Balance of payments developments
(in % of GDP)
Balance of payments developments
(in % of GDP)
-21.2% -21.3%
-18.8%
4.1%
19.0%
12.9%
-30%
-20%
-10%
0%
10%
20%
30%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Current account balance External financing to the private sector

Contribution to foreign exchange income*
in 2012
(Curaçao)
in 2012
(Curaçao)
July 23, 2013 30*Income from the export of goods and services
Freezone
19%
Bunkering
14%
Merchandise excl.
freezone
7%
Transportation
7%
Refining
14%
Tourism
23%
International
financial services
4%
Other services
11%

in 2000
(Curaçao)
in 2000
(Curaçao)
Freezone
17%
Bunkering
6%
Merchandise excl.
freezone
11%
Transportation
7%
Refining
16%
Tourism
14%
International
financial services
18%
Other services
11%

in 2012
(St. Maarten)
in 2012
(St. Maarten)
Bunkering
1%
Merchandise
10%
Transportation
3%
Tourism
72%
International
financial services
1%
Other services
13%

July 23, 2013 33
Tourism sectorTourism sector
811.4
971.7
1287.3
1506.6
0
400
800
1,200
1,600
2008 2009 2010 2011 2012
NAf.million
Curacao St. Maarten

July 23, 2013 34
Tourism sectorTourism sector
$542.8 $569.7
$841.7 $858.5
0
250
500
750
1,000
2008 2009 2010 2011 2012 2013*
US$million
Curacao St. Maarten

July 23, 2013 35
International financial sectorInternational financial sector
*Projection CBCS
0
150
300
450
2008 2009 2010 2011 2012
NAf.million
Net operational income Profit tax BRK windfall 2010

CentraleBankvanCuraçaoenSintMaartenCentraleBankvanCuraçaoenSintMaartenCentraleBankvanCuraçaoenSintMaarten Refining feeRefining fee
July 23, 2013 36*Projection CBCS
0
100
200
300
400
500
600
700
2006 2007 2008 2009 2010 2011 2012
NAf.million

July 23, 2013 37
Monthly import coverageMonthly import coverage
0
1
2
3
4
5
Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Months
Import coverage norm Import coverage

July 23, 2013 38
Monetary and financial sectorMonetary and financial sector

July 23, 2013 39
Main monetary developmentsMain monetary developments
• Moderate increase in money supply.
• Moderation in private credit extension.
• Declining trend in interest rates continued.

July 23, 2013 40
Money supplyMoney supply
0
1,000
2,000
3,000
4,000
5,000
2008 2009 2010 2011 2012
NAf.million
Net domestic assets Net foreign assets

July 23, 2013 41
Net domestic creditNet domestic credit
84
196
610
218
-162
-100
-1,100
-800
-500
-200
100
400
700
2008 2009 2010 2011 2012
NAf.million
Government Private sector Other

July 23, 2013 42
Domestic interest rates
(commercial bank lending rates)
(commercial bank lending rates)
0%
4%
8%
12%
16%
Mortgages Time loans

July 23, 2013 43
(borrowing rates)
(borrowing rates)
0%
2%
4%
6%
8%
10%
Passbook savings Time deposits (12 months)

July 23, 2013 44
(government securities)
(government securities)
0%
2%
4%
6%
8%
10%
Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Gov. bond (5yr, eff. yield) Treasury bills (1 month)

CentraleBankvanCuraçaoenSintMaartenCentraleBankvanCuraçaoenSintMaartenCentraleBankvanCuraçaoenSintMaarten Loans to the private sector
(year-on-year growth)
Loans to the private sector
(year-on-year growth)
July 23, 2013 45
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Loans to the private sector Loans to the private sector Curaçao
Loans to the private sector Sint Maarten

July 23, 2013 46
Main financial developmentsMain financial developments
• Banks:
– Improved capitalization.
– Further increase in non-performing loans.
– Decrease in earnings and profitability.
• Institutional investors:
– Increase in assets.
– Decrease in profitability, except non-life
insurance industry.

July 23, 2013 47
Capital adequacyCapital adequacy
9.9% 10.1%
0%
2%
4%
6%
8%
10%
12%
2008 2009 2010 2011 2012
Tier 1 capital-to-total assets 4% norm

July 23, 2013 48
Assets qualityAssets quality
3.0% 3.2%
6.8%
8.1%
3.0% 3.1%
0.0%
3.0%
6.0%
9.0%
2008 2009 2010 2011 2012
Gross specific provisions-to-total loans Non-performing loans-to-total loans
Gross general provisions-to-total loans

July 23, 2013 49
Earnings & profitabilityEarnings & profitability
1.9%
1.7%
0%
1%
2%
3%
2008 2009 2010 2011 2012
Return-on-assets 0.6% norm

July 23, 2013 50
Outlook 2013 & 2014Outlook 2013 & 2014

Expected developments in 2013Expected developments in 2013
July 23, 2013 51
2012 2013
Current account balance (in mln NAf.) -1,382.1 -1,258.4
Change in foreign reserves (in mln NAf.)* 277.4 165.2
GDP growth (%)
Curaçao -0.1 -0.7
Inflation (%)
Curaçao 3.2 3.0
*- sign means an increase

• Real GDP of Curaçao is expected to contract by
0.7% in 2013.
• The economic contraction is due to a decline in
domestic demand, mitigated by an increase in net
foreign demand.
• Inflation will decelerate to 3.0%, owing largely to a
projected decline in international oil and food
prices.
July 23, 2013 52

• Sint Maarten’s GDP is estimated to expand by
1.1% in 2013, a deceleration compared to the real
growth of 1.5% in 2012.
• The economic slowdown is largely attributable to
weakened activities in the restaurants & hotels and
the wholesale and retail trade sectors.
• Inflation will ease to 3.0%, reflecting mainly lower
projected international oil and food prices.
July 23, 2013 53

Balance of payments projectionBalance of payments projection
July 23, 2013 54
165.2277.4-48.4-27.6-538.9Change in reserves
240.0573.7182.2-1,529.3-188.7Portfolio investments
455.0261.61,076.21,456.0786.7Loans and credits
110.0112.188.4228.6196.4Direct investments
805.0947.41,346.9155.4794.4External financing
12.369.8123.11,200.8200.6Capital account
-1,258.4-1,382.1-1,466.5-1,427.8-608.6Current account
2013*2012201120102009

• In the baseline scenario, the economy of Curacao
is projected to expand by 0.1% in 2014.
• Growth will be driven by increased net foreign
demand. By contrast, domestic demand will
contract.
• Inflation will decelerate to 2.8% in line with the
development of the inflation rate in the United
States.
July 23, 2013 55

• Assuming the construction of a new hospital will
commence in 2014, real GDP will expand by 1.1%
• Growth will be driven by increased domestic
demand, particularly government investment,
mitigated by a decline in net foreign demand.
July 23, 2013 56

• The economy of Sint Maarten is projected to grow
by 1.0% in 2014, driven mainly by the tourism,
transportation, and marine trade sectors.
• Growth in tourism will stem primarily from more
stay-over tourism as cruise tourism is projected to
remain flat.
• Inflation will ease further to reach 2.7% supported
by the projected decline in international oil and
food prices. An increase in excises on tobacco and
alcohol will contribute to inflationary pressures.
July 23, 2013 57

Economic developments 2011-2014Economic developments 2011-2014
2011 2012 2013* 2014*
Real GDP growthReal GDP growth (%)(%)
Curaçao 0.6 -0.1 -0.7 0.1
Sint Maarten -1.5 1.5 1.1 1.0
InflationInflation (%)(%)
Curaçao 2.3 3.2 3.0 2.8
Sint Maarten 4.6 4.0 3.0 2.7
Current account balance (in mln NAf) -1,466.5 -1,382.1 -1,258.4 -1,072.8
Current account balance (% GDP) -21.3 -18.8 -17.0 -14.1
July 23, 2013 58
* Estimate CBCS

2011 2012 2013* 2014*
Government balanceGovernment balance
Curaçao (in mln NAf.) -153.7 -110.3 0 0
% GDP -2.8 -2.0 0 0
Sint Maarten (in mln NAf.) 10.3 27.9 0 0
% GDP 0.7 1.8 0 0
DebtDebt--toto--GDPGDP ratio (%)ratio (%)
Curaçao 40.6 39.4 38.5 37.4
Sint Maarten 23.8 22.5 21.4 20.6
July 23, 2013 59* Estimate CBCS
Assumption: no debt accumulation in 2013 and 2014
Economic developments 2011-2014Economic developments 2011-2014

July 23, 2013 60
Caribbean benchmarkingCaribbean benchmarking

61 July 23, 2013
GDP growth rate (%)GDP growth rate (%)
Source: IMF World Economic Outlook,
estimates CBCS, Central Bank of Aruba
-0.1
1.5
-0.7
1.1
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
2012 2013

62 July 23, 2013
Inflation (%)Inflation (%)
3.2
4.0
3.0 3.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
2012 2013

63 July 23, 2013
Government expenditure
(percentage of GDP)
Government expenditure
(percentage of GDP)
32
26
28 27
0
5
10
15
20
25
30
35
40
45
2012 2013
* No estimates for 2013

64 July 23, 2013
Public debt-to-GDP ratio (%)Public debt-to-GDP ratio (%)
* No estimates for 2013
39
22
39
22
0
20
40
60
80
100
120
140
160
2012 2013

July 23, 2013 65
-2.8
-18.8
-30
-25
-20
-15
-10
-5
0
Antigua and
Barbuda Aruba Bahamas Barbados
Curaçao &
SXM Dominica Grenada
2004 2012
Current account deficit
(percentage of GDP)
Current account deficit
(percentage of GDP)

July 23, 2013 66
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