The Barbados-based Caribbean Development Bank (CDB) Friday said economic performance across the Caribbean remained subdued in 2025 as global uncertainty, climate shocks, and domestic structural challenges weighed on 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,” said Christine Dawson, CDB’s Acting Director of Economics.
“Strengthening institutions, accelerating reforms, and improving project execution will be critical to unlocking higher, more inclusive, and more sustainable growth across the region.”
The CDB in its latest Caribbean Economic Review and Outlook 2025-2026, said that regional growth, excluding Guyana, slowed to 0.6 per cent in 2025 from 1.4 per cent, the previous year, as activity weakened across most of the Bank’s 19 Borrowing Member Countries (BMCs).
The CDB said that including Guyana, regional growth was 4.7 per cent, down from 8.3 per cent in 2024, with Guyana continuing to be the primary driver of regional performance.
Caribbean economies faced heightened geopolitical uncertainty, evolving trade and tariff policies, weaker external demand, and intensifying climate-related disruptions during the year. Tourism activity continued to support growth, albeit at a slower pace in several service-exporting economies, while commodity exporters recorded mixed performances.
Suriname experienced moderate growth supported by offshore energy-related investment, while Trinidad and Tobago saw flat growth amid weakness in both the energy and non-energy sectors. Jamaica and Haiti were affected by climate-related disruptions, including Hurricane Melissa, which dampened economic activity and tourism demand. Haiti’s economy contracted for the seventh consecutive year as insecurity continued to suppress growth.
The CDB said that despite slower economic activity, labour market conditions remained broadly stable across the region, with unemployment declining in most reporting BMCs. However, longstanding youth and gender disparities persisted, alongside labour shortages in some sectors. Inflation also moderated across the region, supported by lower global commodity prices, although it remained above pre-pandemic levels in most economies.
The report further notes that fiscal performance across the region was mixed. Excluding Guyana, the regional primary surplus narrowed to 1.3 per cent of gross domestic product (GDP) in 2025 from 1.6 per cent in 2024, reflecting slower revenue growth and rising expenditure pressures.
It said debt levels remained elevated in several economies, with nine BMCs recording central government debt-to-GDP ratios above 60 per cent.
Meanwhile, the region’s financial sectors remained broadly stable, supported by adequate capitalisation, high liquidity, strengthened credit growth, and continued regulatory reforms.
Looking ahead, the CDB projects that regional growth excluding Guyana will remain subdued at 1.1 per cent in 2026. It said including Guyana, growth is expected to rise to 6.2 per cent, largely reflecting continued expansion in Guyana’s oil sector.
However, the outlook remains clouded by significant downside risks, including slower global growth, geopolitical tensions, commodity price volatility, climate shocks, and fiscal vulnerabilities. (CMC)
