Cft: St. Maarten met 2025 budget norm, but warns of serious liquidity risks, delays

GREAT BAY--St. Maarten recorded a preliminary surplus of XCG 21 million on its ordinary service for 2025 and is, for now, in compliance with the central budget norm under the Kingdom Financial Supervision Act, according to the College financieel toezicht Curaçao en Sint Maarten (Cft) in a letter to Minister of Finance Marinka Gumbs, dated March 27, 2026. At the same time, the Cft expressed serious concern about the country’s liquidity position, delayed budget execution, and the continued absence of collective sector reports needed to assess compliance with the interest burden norm.

In its response to St. Maarten’s fourth 2025 execution report, the Cft said the late adoption of the 2025 budget, which was only finalized halfway through the year, did not support effective policy implementation or investment execution. The council also noted that the fourth execution report itself was submitted 31 days after the legal deadline.

According to the Cft, the XCG 21 million surplus was XCG 13 million higher than projected in the approved 2025 budget. However, both revenues and expenditures came in below budget, which the council said is problematic because planned measures and projects were not carried out as intended. It further noted that, had those plans been fully executed, actual revenues would have been insufficient to cover them.

The report shows that St. Maarten realized XCG 565 million in revenues in 2025, which was XCG 21 million below budget. Lower income from contributions and subsidies, down by XCG 15 million, and lower permit revenues, down by XCG 9 million, accounted for much of the shortfall. Tax revenues were largely in line with projections, although the Cft noted that part of the collection reflected one-time income that had been expected in 2024 but materialized in early 2025 instead. The council repeated its earlier call for St. Maarten to clearly distinguish between structural and incidental revenues in future reporting.

On the expenditure side, total realized spending amounted to XCG 544 million, or XCG 33 million below the approved budget. The Cft said this was driven mainly by lower personnel costs and lower spending on goods and services, due in large part to unfilled vacancies, postponed projects, and delayed implementation tied to the late budget approval. While lower spending supported budget balance, the council said it remains troubling for the country’s development that planned actions were not carried out on time.

The Cft also highlighted major concerns about liquidity. According to the execution report, St. Maarten’s opening balance of free liquidity for 2026 stands at XCG 13 million, with the projected year-end balance falling to XCG 5 million. The council described that level as extremely low and said it poses a real risk to the country’s ability to meet obligations and absorb financial setbacks. It urged government to include a clear overview and explanation of realized liquidity during the current year, along with estimated liquidity for future years, in subsequent execution reports.

In the area of investments, the Cft said St. Maarten executed XCG 83 million in capital investments for central government through the fourth quarter of 2025, compared to XCG 188 million budgeted. In addition, XCG 14 million was spent on the Mental Health Foundation in line with the budget, while a planned XCG 77 million investment in GEBE had not yet been carried out. The council said St. Maarten provided more insight into completed investments in the fourth report, but stressed that a clear multi-year plan is still needed for pending investments and the policy choices attached to them.

The Cft further stated that it is still unable to test whether St. Maarten exceeds the interest burden norm because final collective sector reports for the years 2021 through 2025 have not yet been submitted. St. Maarten has indicated that an assignment has recently been issued to prepare those reports, which the council called a positive step. It said it expects the missing reports to be delivered during 2026 so that testing against the interest burden norm can take place from 2027 onward.

The council also pointed to persistent weaknesses in financial management, including budgets being adopted too late on a structural basis. It noted that no 2026 budget has yet been adopted and referenced the request by the Kingdom Council of Ministers for St. Maarten to finalize that budget as soon as possible. The Cft said St. Maarten has submitted an improvement plan aimed at ensuring a timely adopted budget for 2027, and that it remains in contact with government on the plan’s execution.

The Cft asked that future execution reports incorporate the results of the fourth 2025 report into still-to-be-prepared budgets and explain any deviations in projections. It also called on St. Maarten to submit the long-outstanding collective sector reports during 2026 so that proper testing against the legal interest burden standard can resume.

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