Recent Posts
Caribbean economies face an uncertain outlook in 2026 amid global economic headwinds, although Guyana is expected to remain a standout performer as its rapidly expanding oil sector continues to drive strong growth, according to the Inter-American Development Bank (IDB).
The regional lender said the Caribbean remains highly vulnerable to external shocks, including changes in demand from advanced economies such as the United States, geopolitical tensions and shifts in China’s demand for commodities, all of which could influence commodity prices and economic performance.
Three Caribbean economies — Guyana, Trinidad and Tobago and Suriname — are particularly exposed because of their heavy reliance on energy and commodity exports.
Economic growth in the United States is expected to be driven largely by investment in artificial intelligence rather than consumer spending, which has historically been the main engine of the U.S. economy. That shift could affect tourism-dependent Caribbean countries, as visitor spending is closely tied to U.S. employment levels and household income.
Some tourism segments, including all-inclusive packages and cruise travel, may be especially sensitive to weakening labour markets in the United States, the IDB said.
Oil prices are expected to remain relatively low over the medium term due to sluggish global demand growth, particularly from China, alongside ample global supply. Global natural gas production is also projected to increase over the next two years, which could further dampen prices.
Lower energy prices could ease current account pressures for oil-importing Caribbean nations. For Guyana, however, softer prices could moderate the pace of the country’s oil-driven economic boom and reduce macroeconomic volatility.
In 2025, the Caribbean experienced mixed economic performance. Strong tourism activity in countries such as The Bahamas and Barbados, stable non-energy sectors in Trinidad and Tobago and high investment in Suriname supported regional growth.
Guyana remained the region’s fastest-growing economy, with government figures estimating expansion of about 19 per cent in 2025, driven by robust offshore oil production.
Elsewhere, economic growth in the region was tempered by natural disasters. A devastating hurricane in Jamaica is estimated to have cut the country’s economic growth by about three percentage points in 2025, with output projected to contract by 1.3 per cent.
As a result, Caribbean economies excluding Guyana are estimated to have grown by 0.7 per cent in 2025, down from a 1.6 per cent forecast before Hurricane Melissa made landfall, the IDB said.
Despite ongoing risks, opportunities remain for the region. Diversification within tourism and services, technology-focused foreign direct investment, continued oil expansion in Guyana and major energy investments in Suriname could support growth.
Strengthening resilience will be critical as Caribbean nations navigate an uncertain global environment, particularly as they confront climate risks and economic volatility, the IDB added.
