April 27, 2026
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 published by the Caribbean Development Bank. The report highlights a moderation in economic activity across most of the region, reflecting a more difficult external and domestic environment.
Regional growth, excluding Guyana, declined to 0.6 per cent in 2025, down from 1.4 per cent in the previous year. When Guyana is included, overall growth stood at 4.7 per cent, also lower than the prior year’s expansion, although the oil-producing economy continues to play a central role in supporting regional performance. This divergence underscores the uneven nature of growth across Caribbean economies.
This uneven performance reflects a complex mix of challenges affecting the region. Geopolitical tensions, shifting trade and tariff policies, and weaker external demand have all contributed to softer economic activity. At the same time, more frequent climate-related disruptions have added to these pressures, particularly for smaller and more vulnerable economies.
Tourism remained a key pillar of growth, although momentum slowed in several service-oriented economies. Commodity-exporting countries experienced mixed outcomes, with some benefiting from energy-related investments while others faced stagnation. Suriname recorded moderate expansion supported by offshore developments, while Trinidad and Tobago experienced limited growth due to weakness across both its energy and non-energy sectors.
In contrast, countries such as Jamaica and Haiti were more directly affected by climate-related events, including Hurricane Melissa, which disrupted economic activity and reduced tourism flows. Haiti’s economy continued to contract amid persistent insecurity, highlighting the ongoing challenges facing the region’s most vulnerable economies.
Despite slower growth, labour market conditions remained relatively stable. Unemployment declined in several countries, although structural challenges persist, particularly for youth and women. At the same time, labour shortages in certain sectors have begun to emerge, reflecting shifts in economic activity and workforce dynamics.
Inflation across the region showed signs of easing, supported by lower global commodity prices. However, price levels remain elevated compared to pre-pandemic conditions, indicating that cost pressures have not fully normalised. This has implications for household purchasing power and overall economic stability.
Fiscal conditions presented a mixed picture. The regional primary surplus narrowed as governments faced slower revenue growth alongside rising expenditure demands. Debt levels remain a concern, with several countries maintaining elevated debt-to-GDP ratios. Nonetheless, financial systems across the region remain broadly stable, supported by strong capital buffers, high liquidity levels, and ongoing regulatory improvements.
Looking ahead, growth is expected to remain subdued for much of the region, particularly when excluding Guyana. While overall regional expansion is projected to improve with continued strength in the oil sector, the outlook remains uncertain. Risks are tied to global economic conditions, commodity price volatility, climate shocks, and fiscal constraints.
While the Caribbean has demonstrated resilience in the face of multiple challenges, the path to stronger and more inclusive growth will depend on continued reforms, improved institutional capacity, and more effective execution of development projects across the region.
Source: (Caribbean National Weekly)
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