Caribbean economies recorded slower growth in 2025 amid intensifying global uncertainty, climate shocks, and fiscal pressures, according to Caribbean Development Bank (CDB/the Bank) findings shared Tuesday at the Bank’s Annual News Conference.

Presenting a review of the Bank’s 2025 performance and the economic outlook for 2026, Jason Cotton, Acting Deputy Director of Economics, noted that growth across the region decelerated last year as external conditions became less supportive and downside risks materialised.

Excluding Guyana, regional growth slowed to 0.6% in 2025, down from 1.4% in 2024. When Guyana is included, overall growth reached 4.7%, reflecting that country’s continued double-digit expansion, albeit at a slower pace than in the previous year.

“Small, open economies remain highly exposed to external shocks,” Cotton said. “What is more concerning in this moment is the persistence of uncertainty and the narrowing room for policy error.”

Climate Shocks and Sectoral Divergence

Economic performance varied widely across the region. Among commodity exporters, Suriname experienced accelerated growth driven in part by continued oil-related investment, while Trinidad and Tobago recorded muted expansion.

Service-exporting economies saw slower growth as tourism momentum eased. In Jamaica, Hurricane Melissa compounded earlier damage from Hurricane Beryl, resulting in a second consecutive year of economic contraction.

Inflation moderated, in line with global trends, falling to an average of 3.4% across the region, down sharply from its 2022 peak of 9.7%. Labour market conditions improved in several countries, with declining unemployment and rising workforce participation, although disparities persist among youth and women.

Fiscal Pressures Re-emerge

Fiscal consolidation stalled in several of the Bank’s 19 Borrowing Member Countries. Excluding Guyana, the regional primary surplus narrowed to 1.3% of GDP as expenditure growth outpaced revenues. When Guyana is included—reflecting significant capital spending—the regional primary surplus narrowed further to 0.2% of GDP.

While the regional central government debt-to-GDP ratio declined slightly to 46.6%, vulnerabilities remain. Nine countries continue to record debt levels above 60% of GDP. In few instances, fiscal responsibility frameworks enabled orderly adjustment to climate shocks through escape clauses.

2026 Outlook: Modest Growth, Elevated Risks

Looking ahead, the Bank projects modest growth for 2026. Excluding Guyana, regional GDP is forecast to expand by 1.1%. Including Guyana—where growth is projected to exceed 20%—regional growth is expected to reach 6.2%.

Prospects among other commodity exporters remain closely tied to commodity prices and production trends. Service-exporting economies are anticipated to grow modestly, supported primarily by tourism and construction activity. Inflation dynamics will be shaped by developments in global commodity markets.

However, global uncertainty, geopolitical tensions, climate-related shocks, and fiscal vulnerabilities—particularly in highly indebted countries—continue to cloud the 2026 outlook.

Development Imperatives: Building Resilience by Design

Against this backdrop, CDB underscored several development imperatives for the region:

• Strengthening implementation capacity to ensure development plans and financing translate into results;
• Diversifying economies to reduce overreliance on single industries and foster private-sector-led growth;
• Building resilience by design, through climate-resilient infrastructure, improved disaster-risk financing, and adaptive social protection systems;
• Safeguarding debt sustainability through stronger fiscal institutions and wider adoption of fiscal responsibility frameworks; and
• Investing in people, equipping citizens with skills and expanding decent work opportunities to unlock productivity and inclusive growth.

“Resilience is built through credible policy choices, stronger institutions, disciplined execution, and investment in our people, and regional solidarity,” Cotton said. “If we rise to meet this moment, we will shape a more stable, inclusive, and sustainable Caribbean future.”