BRIDGETOWN, Barbados – The Caribbean Development Bank (CDB) has projected a regional economic growth rate of 2.5 percent for 2025, excluding Guyana, while the overall growth, including Guyana’s oil-driven expansion, is anticipated to reach 4.6 percent. Despite a positive outlook, CDB’s director of economics highlighted that challenges such as geopolitical tensions, climate risks, and delays in critical infrastructure projects could significantly affect the region’s economic performance.
During the Bank’s Annual News Conference on March 19, 2025, the director stated: “Although the Caribbean economy shows signs of continued growth, maintaining this trajectory will require focused policy interventions. Priority should be given to enhancing resilience against climate change, diversifying foreign exchange income sources, and ensuring sound fiscal management.”
Regional GDP growth—excluding Guyana—decelerated to 1.7 percent in 2024 from 2.5 percent in 2023, as the post-pandemic recovery began to slow. Fifteen of the CDB’s Borrowing Member Countries (BMCs) restored economic output to pre-pandemic levels, with Guyana achieving a remarkable 43.5 percent increase. Conversely, Haiti faced severe economic challenges, marking its sixth contraction due to ongoing political instability and inflation. Service-exporting economies also faced a slowdown, with growth recorded at 1.6 percent, down from 2.8 percent in 2023. Tourism saw robust activity, surpassing pre-pandemic figures in multiple BMCs, while construction experienced growth fueled by infrastructure investments and private-sector initiatives.
Although inflation has decreased and unemployment rates have fallen in many nations, hurricane Beryl’s impact on several BMCs highlighted the region’s susceptibility to climate-related challenges. Fiscal health improved, with a majority of BMCs reporting primary surpluses, despite rising public sector wages and increased infrastructure spending. The regional debt-to-GDP ratio decreased to 50.9 from 55.6 percent in 2023, with five BMCs—Anguilla, Barbados, Belize, Jamaica, and Suriname—achieving sovereign credit rating upgrades.
Economic growth in 2025 is expected to be underpinned by the ongoing strength in tourism and construction sectors. Service-exporting economies are projected to see a growth rate of 2.2 percent, while commodity exporters are expected to gain traction. However, challenges such as potential slowdowns among key trading partners, geopolitical instability, and climate-related disruptions pose risks to this growth outlook. Delays in infrastructure project execution may also hinder economic advancement.
“To sustain growth, it is imperative for countries to prioritize structural reforms and streamline the execution of infrastructure projects,” the chief economist emphasized. “Consistent policies and resilience-focused measures will be essential for navigating these uncertainties.”
Highlighted Action Areas for 2025 by CDB Include:
- Enhancing Climate Resilience through robust disaster preparedness and fortifying infrastructure against climate impacts.
- Advancing Economic Diversification by modernizing trade infrastructure and strengthening regulatory frameworks for businesses.
- Promoting Fiscal Discipline via effective fiscal policies and reforms to ensure sustainable growth and debt management.
“The Caribbean’s future hinges on decisive action,” the director noted. “The CDB is committed to supporting member countries with financial aid, technical support, and strategic direction.”
As part of its ongoing efforts, the CDB will release a Caribbean Economic Review and Outlook in April 2025, providing further insights into regional economic trends.
