Above: Curacao

By the Caribbean Journal staff

Standard & Poor’s has affirmed its ratings on the government of Curacao and raised the island’s outlook to stable from negative, the New York-based ratings agency announced.

Curacao’s government has “A-” and “A-2” long-term and short-term credit ratings, respectively.

“The outlook revision reflects a series of measures taken by the government since January 2013 to improve Curacao’s fiscal position, including reforms to tackle the deterioration in the public-sector health and pension systems seen over the last five years,” said Standard & Poor’s credit analyst Richard Francis.

Curacao’s government has raised its retirement age to 65 from 60, and lifted health care and general pension premiums, along with a series of fiscal measures.

Because of these measures, S&P said it expects Curacao’s deficit in the general pension system to “gradually return to surpluses over the next decade.”

Despite improvements in the island’s debt situation, Curacao’s economy is expected to contract by about 2 percent this year, Francis said.

The agency said its ratings were supported by what it called Curacao’s “stable democratic parliamentary system and rule of law within the Kingdom of the Netherlands, its prosperous economy, high level of social development and strong government balance sheet.”

“The country’s low per capita GDP growth and limited monetary and external flexibility constrain the ratings. Gaps and inconsistencies in official external data, especially on the country’s international investment position, also constrain the ratings,” S&P said.