Economic growth across the Caribbean slowed in 2025 as global uncertainty, climate-related shocks and structural challenges weighed on regional performance, according to the latest Caribbean Economic Review and Outlook 2025-2026 published by the Caribbean Development Bank (CDB).
The report shows that regional growth—excluding Guyana—fell to 0.6% in 2025, down from 1.4% in 2024, reflecting weaker activity across most of the Bank’s 19 Borrowing Member Countries. When Guyana is included, overall growth stood at 4.7%, also down from 8.3% the previous year, with the oil-producing nation continuing to drive regional expansion.
Uneven performance across economies
The CDB noted that Caribbean economies faced a complex mix of challenges, including geopolitical tensions, shifting trade and tariff policies, weaker external demand, and more frequent climate disruptions.
Tourism remained a key support for growth, though momentum slowed in several service-exporting economies. Commodity-exporting countries recorded mixed results.
Suriname posted moderate growth, supported by offshore energy investments, while Trinidad and Tobago saw flat growth due to weakness in both its energy and non-energy sectors.
Meanwhile, Jamaica and Haiti were impacted by climate-related events, including Hurricane Melissa, which disrupted economic activity and dampened tourism demand. Haiti’s economy contracted for a seventh consecutive year amid ongoing insecurity.
Labour and inflation trends
Despite slower growth, labour market conditions remained relatively stable, with unemployment declining in most reporting countries. However, persistent disparities affecting youth and women continued, alongside labour shortages in certain sectors.
Inflation eased across the region, driven by lower global commodity prices, although it remained above pre-pandemic levels in most economies.
Fiscal pressures and debt concerns
Fiscal performance was mixed. Excluding Guyana, the regional primary surplus narrowed to 1.3% of GDP in 2025, down from 1.6% in 2024, as governments faced slower revenue growth and increased spending pressures.
Debt levels also remained a concern, with nine countries recording central government debt-to-GDP ratios exceeding 60%.
At the same time, the region’s financial systems were described as broadly stable, supported by strong capitalisation, high liquidity, improved credit growth, and ongoing regulatory reforms.
Outlook for 2026
Looking ahead, the CDB projects that growth excluding Guyana will remain subdued at 1.1% in 2026. Including Guyana, regional growth is expected to reach 6.2%, largely driven by continued expansion in its oil sector.
However, the outlook remains uncertain, with risks tied to global economic conditions, geopolitical tensions, commodity price volatility, climate shocks and fiscal vulnerabilities.
Christine Dawson said while the region has shown resilience, more work is needed to unlock stronger growth.
“While the Caribbean continues to demonstrate resilience, the region’s growth prospects remain constrained by external uncertainty, climate-related shocks, and longstanding structural challenges,” she said.
Dawson added that strengthening institutions, accelerating reforms, and improving project execution will be key to achieving more inclusive and sustainable economic growth across the Caribbean.
