BRIDGETOWN, Barbados – The Caribbean region delivered a muted economic performance in 2025, held back by a confluence of global instability, repeated climate disasters and long-running domestic structural obstacles, the Caribbean Development Bank (CDB) has warned in its flagship annual report, the *Caribbean Economic Review and Outlook 2025-2026*.
The analysis tracks economic activity across the CDB’s 19 borrowing member countries (BMCs), revealing a clear slowdown across most of the bloc. When Guyana’s rapidly expanding oil sector is excluded, regional growth decelerated to 0.6% in 2025, down from 1.4% recorded in 2024. Even with Guyana’s output included, aggregate regional growth fell to 4.7% from 8.3% in 2024, confirming the South American nation remains the single largest engine of overall regional expansion.
A range of overlapping headwinds dragged on regional activity over the year. Heightened geopolitical friction, shifting international trade and tariff rules, softening global demand for exports and increasingly severe climate-related disruptions created a challenging operating environment for most economies. Tourism, a traditional core growth driver for many small island states, still contributed to expansion, but its pace of growth slowed noticeably across a number of service-exporting economies. Commodity-producing nations saw divergent results, with some posting modest gains and others struggling to maintain output.
Suriname stood out among commodity exporters, logging moderate growth driven by fresh investment in its offshore energy sector. By contrast, Trinidad and Tobago posted zero growth, as both its energy and non-energy segments faced persistent weakness. Jamaica and Haiti both suffered severe economic disruption from climate events, most notably Hurricane Melissa, which slashed output and curbed tourist arrivals. Haiti’s economy extended its prolonged downturn, contracting for the seventh straight year as widespread ongoing insecurity continued to choke business activity and investment.
Against the broader slowdown, several key economic indicators showed limited bright spots. Labour market conditions held broadly steady across most of the region, with unemployment falling in a majority of reporting BMCs. That said, long-standing inequities in employment outcomes for young people and women remain unaddressed, and several sectors are now grappling with acute labour shortages. Inflationary pressures also eased across the bloc in 2025, pulled down by falling global commodity prices, though price growth still remains above pre-pandemic levels in most Caribbean economies.
Fiscal performance across the region was uneven, the report confirmed. Excluding Guyana, the aggregate regional primary surplus narrowed from 1.6% of GDP in 2024 to 1.3% of GDP in 2025, a shift driven by slower tax revenue growth and mounting spending pressures. Sovereign debt levels also remain worryingly high across much of the region: nine BMCs now report central government debt-to-GDP ratios above the 60% threshold widely seen as a marker of fiscal vulnerability.
The region’s financial sector, by comparison, remains on solid footing, the report noted. Adequate capital buffers, high levels of liquidity, accelerating credit growth and ongoing regulatory reforms have kept the financial system broadly stable despite broader economic headwinds.
Looking forward to 2026, the CDB projects the region will see only a mild uptick in growth. Excluding Guyana, regional expansion is forecast to remain subdued at just 1.1%, while aggregate growth including Guyana is expected to climb to 6.2% – a rise almost entirely tied to continued rapid expansion in Guyana’s oil sector.
Crucially, the outlook remains vulnerable to a wide range of downside risks that could derail even this modest projected growth. These include a deeper slowdown in the global economy, escalating geopolitical tensions, volatile commodity prices, more frequent and severe climate shocks, and persistent fiscal fragility in many small economies.
“While the Caribbean continues to demonstrate resilience in the face of repeated shocks, 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 structural reforms, and improving project execution will be critical to unlocking higher, more inclusive, and more sustainable growth across the region.”