An advance look at a new World Bank report shows that Jamaica has emerged as one of the Caribbean’s fiscal success stories — even as inflation and global uncertainty continue to cast long shadows over the region’s economy.
The upcoming report, Organized Crime and Violence in Latin America and the Caribbean, set to be released on Monday, April 28, praises Jamaica for its sharp decline in public debt. Alongside Barbados and Belize, Jamaica has trimmed its debt-to-GDP ratio by an impressive 26 to 40 percentage points in recent years, reversing much of the pandemic-era surge. The report specifically notes Jamaica’s use of the Economic Programme Oversight Committee (EPOC) to ensure transparency and build societal consensus around tough fiscal policies — holding it up as a model for the rest of Latin America and the Caribbean.
However, Jamaica’s economy still faces major hurdles. Despite broad progress in taming inflation across Latin America and the Caribbean (LAC), the World Bank points out that Jamaica — like the Dominican Republic — has seen a slower reduction in inflation compared to countries with currency pegs. Inflation surged in Jamaica during 2022, driven by food and fuel price spikes, and has proven “considerably persistent” even as prices began to normalize in 2023.
Most Caribbean nations, protected by pegged currency regimes, weathered the initial inflation shock better than their Latin American neighbors. Still, the World Bank warns that labor cost pressures and stubborn international food prices are slowing the final push toward inflation targets. Across the region, inflation is expected to return to normal levels by 2026.
On a broader scale, the World Bank forecasts that Caribbean tourism economies will continue to outperform the wider LAC region. In 2025, St. Vincent and the Grenadines and Dominica are expected to post growth rates above 4 percent — well ahead of the regional average of 2.1 percent. Commodity-exporting nations like Trinidad and Tobago and Suriname should also see slight improvements.
But challenges loom. Slower interest rate cuts in the U.S. and Europe could constrain local monetary policies and weaken Caribbean currencies. Global trade tensions, higher tariffs, and reduced foreign aid — especially for countries like Haiti and conservation efforts in South America — could also drag on regional recovery.
Even with stable debt levels, the World Bank stresses that the Caribbean must create more “fiscal space” through better efficiency, smarter tax policies, and increased public investment in education, infrastructure, and innovation if it wants to secure long-term growth.
