Economic growth across the Caribbean slowed in 2025 as global uncertainty, climate shocks and domestic challenges weighed on regional performance, according to a new report by the Caribbean Development Bank.

The bank’s Caribbean Economic Review and Outlook 2025-2026 found that growth across its 19 borrowing member countries eased to 0.6 per cent in 2025, down from 1.4 per cent in 2024, when excluding Guyana.

Including Guyana, which continues to drive much of the region’s expansion due to its oil sector, overall growth was estimated at 4.7 per cent, down from 8.3 per cent the previous year.

The report pointed to a range of pressures affecting Caribbean economies, including geopolitical tensions, shifting trade and tariff policies, weaker external demand and increasingly severe climate-related disruptions.

Tourism remained a key support for growth, though activity slowed in several service-based economies. Commodity exporters recorded mixed results, with Suriname benefiting from offshore energy investment, while Trinidad and Tobago recorded flat growth amid weakness in both its energy and non-energy sectors.

Meanwhile, Jamaica and Haiti were impacted by climate-related events, including Hurricane Melissa, which disrupted economic activity and tourism. Haiti’s economy contracted for a seventh consecutive year, reflecting ongoing insecurity.

Despite slower growth, labour market conditions remained relatively stable across the region, with unemployment declining in most countries. However, disparities affecting young people and women persisted, alongside labour shortages in some industries.

Inflation eased during the year, supported by lower global commodity prices, but remained above pre-pandemic levels in most economies.

Fiscal performance was mixed, with the regional primary surplus — excluding Guyana — narrowing to 1.3 per cent of GDP in 2025 from 1.6 per cent in 2024. Debt levels also remained elevated, with nine countries recording debt-to-GDP ratios above 60 per cent.

The report said financial systems across the region remained broadly stable, supported by strong capital buffers, high liquidity and ongoing regulatory reforms.

Looking ahead, the bank projects that growth excluding Guyana will remain modest at 1.1 per cent in 2026. Including Guyana, regional growth is expected to rise to 6.2 per cent, driven largely by continued expansion in the country’s oil sector.

However, the outlook remains uncertain, with risks including slower global growth, geopolitical tensions, commodity price swings, climate shocks and fiscal pressures.

“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, the bank’s Acting Director of Economics.

She added that strengthening institutions, accelerating reforms and improving project execution will be critical to achieving more sustainable and inclusive growth across the region.