SANTIAGO, Chile – The Economic Commission for Latin America and the Caribbean (ECLAC) is forecasting that economic growth in the Caribbean, except Guyana for 2026, will be 1.8 per cent, at a slightly slower pace compared with 2025.
It said economic expansion is subject to tourism and construction trends in the subregion, which is highly vulnerable given its dependence on imported energy, high transport costs and exposure to natural disasters.
In its “Overview of the Economies of Latin America and the Caribbean,” released here on Tuesday, ECLAC said that economic growth in Latin America and the Caribbean remained subdued in 2025, constrained by weak domestic demand and an uncertain global environment.
It said external sector results were mixed: some countries recorded higher exports of goods and services, while others were affected by pressure on the terms of trade and greater trade volatility.
Latin America and the Caribbean will experience moderate economic growth in 2025. The slight uptick from 2.3 per cent in 2024 to a projected 2.4per cent this year is supported mainly by domestic demand in several economies, especially private consumption.
ECLAC says the regional economy remains largely dependent on services sectors, which account for the bulk of value added and continue to drive job creation and the recovery from the coronavirus disease (COVID-19) pandemic.
ECLAC noted that Antigua and Barbuda will record economic growth of 4.8 per cent this year, increasing to five per cent next year, The Bahamas will register 2.1 per cent growth in 2025, slightly decreasing to two per cent next year, while Barbados growth of 2.9 per cent this year, will decline slightly to 2.1 in 2025.
According to ECLAC, Belize will register growth of 1.6 this year, increasing to 2.6 in 2025, while Dominica’s economic growth of 4.2 per cent this year, will decline to 3.1 per cent.
Grenada economic growth of 3.6 per cent this year will drop slightly to 3.1 per cent in 2025, with Guyana registering economic growth of 15.2 per cent this year and increasing to 24 per cent in 2025.
Jamaica, which is emerging from the battering it received from Hurricane Melissa in October will have economic growth of 1.5 per cent this year, declining to 1.4 per cent in 2025, while 4
Saint Kitts and Nevis’s economic growth of 1.1 per cent this year, will increase to 2.6 in 2025.
St. Lucia’s economic growth of 2.7 per cent this year, will increase slightly to 2.8 per cent in 2025, with St Vincent and the Grenadines registering growth of 4.7 this year, declining to 3.6 next year.
Suriname’s economic growth of 3.2 per cent in 2025 will increase slightly to 3.4 per cent next year, while Trinidad and Tobago will register growth of 2.5 this year, declining to 1.3 next year.
In its overall review, ECLAC said that on the fiscal front, fiscal consolidation measures and debt interest payments limited the scope for more active policies. Labour markets continued to recover, but more slowly. Employment grew moderately, labour participation and unemployment gaps between men and women persisted and informality remained high in most of the countries.
Inflation continued to decline, making it possible to move towards less restrictive monetary policies, although investment remained subdued and productivity showed no signs of picking up. Momentum came mainly from the services sector, while manufacturing and construction lagged behind.
For 2026, the economic outlook for Latin America and the Caribbean points to continued slow growth in the region, characterised by moderate growth rates, an uncertain international environment and persistent internal constraints on efforts to foster investment, strengthen productivity and expand formal employment.
ECLAC noted that in 2025, the current account deficit in Latin America and the Caribbean will stabilise at around1.6 per cent of gross domestic product (GDP), roughly US$105 billion, but there will be marked differences between subregions. These regional results stem from a combination of international and national factors.
The balance, which represents a continuation of the correction that began in 2022, is a considerable improvement compared to the period 2015–2019, when the deficit averaged around 2.5 per cent of GDP.
A deficit is also projected for 2026, albeit slightly smaller at 1.5 per cent, reflecting the continuation of a consolidation process to address external imbalances.
ECLAC notes that the subregional results were mixed. Central America is closer to balancing its current account, having reduced its deficit thanks to a steady flow of remittances. South American economies recorded a moderate deficit, helped along by a goods account surplus owed to the partial recovery of natural resources exports.
In the Caribbean, meanwhile, a weaker tourism sector and high external financing costs resulted in a significant deterioration in the current account
Inflation continues to subside in the region. In the economies of Latin America and the Caribbean, inflation continued its descent throughout 2025, confirming the trend that begun in 2024.
Fiscal space remained limited amid persistent deficits and declining but still-high debt levels. Public debt in the Caribbean declined to 68 per cent of GDP in June 2025, returning to pre-pandemic levels; nonetheless, that indicator remained above 80 per cent of GDP in several countries.
ECLAC noted that deficits persist in Latin America, while fiscal balances in the Caribbean are expected to worsen. It said that although some countries managed to improve their fiscal balances by increasing tax revenue or curbing public expenditures, others faced additional spending pressures linked to greater interest payments, especially on debt denominated in foreign currency or owed to a large share of foreign creditors, which represents a source of macroeconomic vulnerability.
In its economic outlook for next year, ECLAC is forecasting that growth is expected to remain weak in Latin America and the Caribbean in 2026, amid still-uncertain global conditions
The region’s GDP growth is projected at 2.4 per cent in 2025 and 2.3 per cent in 2026, reflecting four consecutive years of rates close to 2.3 per cent and confirming that Latin America and the Caribbean is caught in a trap of low capacity for growth, ECLAC noted.
