BRIDGETOWN, Barbados – The Caribbean Development Bank (CDB) projects regional economic growth of 2.5 percent in 2025, excluding Guyana, with overall growth reaching 4.6 percent when Guyana’s oil-driven expansion is factored in. Despite a steady outlook, CDB’s director of economics, Ian Durant cautioned that challenges such as geopolitical tensions, climate risks, and the inability to execute critical infrastructure projects in a timely manner could impact economic performance.
Addressing the Bank’s Annual News Conference on March 19, 2025, Durant said: “While the Caribbean economy is set for continued expansion, sustaining growth will require strategic policy action. Strengthening resilience to climate change, taking steps to facilitate the diversification of foreign exchange earning activity, and maintaining sound fiscal management must remain top priorities.”
Regional GDP growth, excluding Guyana, slowed to 1.7 percent in 2024 from 2.5 percent in 2023, as post-pandemic recovery momentum eased. Fifteen of CDB’s Borrowing Member Countries (BMCs) surpassed pre-pandemic output levels. Guyana led regional performance with a 43.5 percent expansion, while Haiti remained in crisis, suffering its sixth economic contraction due partly to political instability and inflationary pressures. Service-exporting economies experienced a slowdown, with growth at 1.6 percent compared to 2.8 percent in 2023. Tourism arrivals remained strong, exceeding pre-pandemic levels in several BMCs, while construction was another key economic driver, bolstered by infrastructure investments and private-sector developments.
While inflation moderated, and unemployment declined in most countries, hurricane Beryl’s devastation across multiple BMCs underscored the region’s vulnerability to climate shocks. Fiscal positions strengthened, with most BMCs achieving primary surpluses, though public sector wages and infrastructure spending increased. While debt levels increased in nominal terms, the regional debt-to-GDP ratio declined to 50.9 from 55.6 percent in 2023, and five BMCs – Anguilla, Barbados, Belize, Jamaica, and Suriname – received sovereign credit rating upgrades.
Economic expansion in 2025 is expected to be driven by continued strength in tourism and construction. Service-exporting economies are forecasted to grow by 2.2 percent, while commodity exporters are set to gain momentum. However, risks remain, including potential slowdowns in major trading partners, geopolitical uncertainty, and climate-related disruptions. Delays in infrastructure execution could also dampen growth.
“To sustain growth, countries must accelerate structural reforms and execute infrastructure projects efficiently,” the chief economist advised. “Policy consistency and resilience-building measures will be critical in navigating uncertainties.”
The CDB highlights three key areas for action in 2025:
- Investing in Climate Resilience particularly disaster preparedness and climate-proofing infrastructure.
- Accelerating economic diversification by modernising trade infrastructure and the institutional framework that supports and regulates businesses.
- Increasing fiscal discipline through sound fiscal policies and institutional reforms to ensure sustainable growth and debt stability.
“The Caribbean’s path forward demands bold action,” Durant emphasised. “The CDB remains committed to supporting its member countries with financial resources, technical expertise, and strategic guidance.”
To provide further insights, the CDB will publish a Caribbean Economic Review and Outlook in April 2025.
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