CARIBBEAN GROWTH OUTLOOK TEMPERED BY GLOBAL RISKS

By | Marvin Cato | HGP Nightly News|

BRIDGETOWN, BARBADOS — The Caribbean Development Bank (CDB) has released a sobering yet dual-speed economic outlook for 2026. While the broader Caribbean faces a “modest and fragile” growth trajectory of just 1.1%, the regional average is set to be catapulted to 6.2% solely by the continued explosive expansion of Guyana’s oil sector.

Presenting the findings at the Bank’s annual news conference on Tuesday, March 3, 2026, Acting Deputy Director of Economics Jason Cotton warned that the “polycrisis” of climate change, high debt, and geopolitical conflict continues to haunt small, open economies.

The “Guyana Factor” in Regional Growth

The stark disparity between Guyana and its neighbors remains the defining feature of the Caribbean’s 2026 fiscal map.

• Guyana’s Lead: Guyana is projected to expand by over 20% in 2026, driven by new floating production storage and offloading (FPSO) vessels coming online.
• The “Rest of the Region”: Excluding Guyana, regional growth plummeted from 1.4% in 2024 to an estimated 0.6% in 2025, with only a slight recovery to 1.1% forecasted for 2026.
• Tourism Warning: Service-exporting nations (like The Bahamas, Barbados, and Jamaica) are seeing tourism momentum ease as global travel costs rise and consumer spending power in key markets like the U.S. and Europe softens.

IDB: Resilience vs. Vulnerability

The Inter-American Development Bank (IDB) echoed these sentiments in its March 3 report, “Resilience and Growth Prospects in a Shifting Global Economy.”

• Average Growth: The IDB projects a 2.1% expansion for the wider Latin America and Caribbean (LAC) region in 2026.
• The Debt Trap: Average public debt in the region remains high at 59% of GDP, with interest payments increasingly “crowding out” essential social spending and climate adaptation investments.
• External Shocks: The IDB specifically noted that its forecasts were compiled just before the recent escalation of military strikes in the Middle East, which has already sent global oil prices toward $85–$100 per barrel.

Key Headwinds: Climate and Geopolitics

The 2026 outlook identifies three “downside risks” that could further derail the modest recovery:

1. Climate Shocks: The memory of Hurricane Melissa (2025) remains fresh; the CDB noted that Melissa struck Jamaica while it was still reeling from Hurricane Beryl, forcing a second consecutive year of contraction for the island’s economy.
2. Geopolitical Fallout: The expanding U.S.-Israel-Iran conflict is already disrupting global aviation and shipping. For the Caribbean, this means higher import costs for food and fuel, and a potential “chilling effect” on international tourist arrivals.
3. Fiscal Pressure: Several countries are seeing a decline in Citizenship-by-Investment (CBI) revenues due to heightened international scrutiny, removing a critical fiscal cushion for many Eastern Caribbean states.

Regional Economic Snapshot: 2026 Projections

“Uncertainty has become more deeply entrenched. Small, open economies remain highly exposed… we must build resilience by design.” — Jason Cotton, Acting Deputy Director, CDB