Guyana drives regional growth as Caribbean economies face slower expansion – CDB

Guyana’s sustained, though slightly slower, economic growth helped offset a broader slowdown across the Caribbean in 2025, according to findings shared Tuesday at the Caribbean Development Bank (CDB) Annual News Conference. Excluding Guyana, regional growth dropped to 0.6 per cent in 2025, down from 1.4 per cent in 2024. When Guyana’s double-digit expansion is included, overall regional growth reached 4.7 per cent, highlighting the country’s continuing contribution to the Caribbean economy. “Small, open economies remain highly exposed to external shocks,” said Jason Cotton, Acting Deputy Director of Economics at CDB. “What is more concerning in this moment is the persistence of uncertainty and the narrowing room for policy error.”

Climate shocks, sectoral divergence
In a release on Tuesday, CDB said that economic performance across the region varied. Among commodity exporters, Suriname recorded faster growth supported by ongoing oil-related investments, while Trinidad and Tobago saw modest expansion. Service-exporting economies experienced slower growth as tourism momentum eased. In Jamaica, Hurricane Melissa compounded prior damage from Hurricane Beryl, resulting in a second consecutive year of contraction. Inflation moderated to an average of 3.4 per cent regionally, down from a 2022 peak of 9.7 per cent. Labour markets showed improvement in several countries, with declining unemployment and rising workforce participation, though disparities remain among youth and women.

Fiscal pressures re-emerge
Fiscal consolidation weakened in several of the Bank’s 19 borrowing member countries. Excluding Guyana, the regional primary surplus narrowed to 1.3 per cent of gross domestic product (GDP) as expenditure growth outpaced revenues. Including Guyana, reflecting significant capital spending, the surplus dropped to 0.2 per cent of GDP. Regional central government debt-to-GDP ratios fell slightly to 46.6 per cent, but nine countries still recorded debt above 60 per cent of GDP. In some cases, fiscal responsibility frameworks helped manage 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 expected to expand by 1.1 per cent, with Guyana’s growth projected to exceed 20 per cent, where overall regional growth could reach 6.2 per cent. Commodity-exporting economies will remain closely tied to global prices and production trends. Service-exporting economies are expected to see modest growth, supported mainly by tourism and construction. Inflation will continue to reflect global commodity market dynamics. However, risks including global uncertainty, geopolitical tensions, climate shocks and fiscal vulnerabilities, especially in highly indebted countries, continue to challenge the outlook.
CDB emphasised key priorities for the region: strengthening implementation capacity to translate plans and financing into results; diversifying economies to reduce dependence on single industries; building resilience through climate-resilient infrastructure, disaster-risk financing and adaptive social protection; safeguarding debt sustainability via stronger fiscal institutions and broader adoption of fiscal responsibility frameworks; and investing in people by equipping citizens with skills and expanding decent work opportunities.
“Resilience is built through credible policy choices, stronger institutions, disciplined execution, 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.”