By: Staff Writer
January 24, 2025
The World Bank said in their Global Economic Prospects report said that growth in the Caribbean is projected to rise to 4.9 percent in 2025.
The bank also said that growth could also be 5.7 percent in 2026, following an estimated
strong pace of 7.7 percent in 2024.
The report also said: “This performance partly reflects the continuing boom in Guyana, driven by the expansion of its new oil extraction sector following the discovery of oil a decade ago. Even excluding Guyana, the subregion’s growth is expected to rise to an average of 3.8 percent annually in 2025-26. Exports to the United States are assumed to remain largely unaffected by trade tensions. However, prospects continue to diverge within the subregion.
“The Dominican Republic is forecast to grow strongly, by an average of 4.9 percent in 2025-26, supported by structural reforms to attract foreign direct investment. Jamaica’s growth is expected to recover in 2025 from the impact of Hurricane Beryl, reaching 2.2 percent and stabilizing at 1.6 percent in 2026.”
Growth in Haiti on the other hand remains uncertain due to the political instability.
The report also said: “Growth in Central America is forecast to increase to 3.5 percent in 2025 and 2026, supported by increasing consumption. Growth in Costa Rica is expected to moderate to 3.5 percent in 2025 and 3.4 percent in 2026, while growth in Panama, underpinned by services exports, is projected to rebound to 3 percent this year and 3.5 percent in 2026.
“Inflation across the subregion varies, with El Salvador and Panama—both dollarized economies—and Costa Rica experiencing inflation rates comparable to those in the United States. Inflation in countries such as Guatemala, Honduras, and Nicaragua has decreased to more moderate levels than in previous years, aligning more closely with central bank targets due to restrictive monetary policies.”
It added: “The growth forecast for the region faces several downward risks. Significant uncertainty surrounding trade and migration could have a negative impact on outcomes. Specifically, trade restrictions may result in decreasing exports. Additionally, a decline in migration flows to the United States could lead to reduced remittances. There are also other risks to consider. Large fiscal deficits are raising concerns about fiscal stability, and sustained core inflation may necessitate tighter monetary policies than previously anticipated.