Caribbean Development Bank Forecasts Economic Growth

CDB’s director of Economics, Ian Durant speaking at he bank’s annual news conference on Wednesday (CMC Photo)

BRIDGETOWN, Barbados, CMC—The Barbados-based Caribbean Development Bank (CDB) is forecasting economic growth of 2.5 percent among its 19 borrowing member countries in 2025. This follows growth of 1.7 percent in 2024, excluding Guyana, whose economy surged by 43.5 percent last year.

Presenting the Regional Economic Performance and Prospects at its annual news conference here on Wednesday, the CDB’s Director of Economics, Ian Durant, said that the 2025 projection also does not include the forecast for Guyana.

Economic Growth Projections

He said growth is forecast to vary among the 16 countries, with Guyana’s expansion expected to slow to 11.9 percent, following its rapid growth in oil production in 2024.

“Nevertheless, the country’s performance will remain a key contributor to the region’s economic growth,” Durant said, adding that including all 19 borrowing member countries, the region is forecast to grow by 4.6 percent.

Among other commodity exporters, growth is expected to gain momentum as they recover while service-exporting economies are projected to expand by 2.2 per cent. Watch video

“Tourism is likely to remain a key driver of economic activity. Construction, supported by public and private investments, is also anticipated to contribute positively to near-term economic performance,” Durant said.

Fiscal Front and Risks

On the fiscal front, the CDB said most governments are expected to maintain primary surpluses, further strengthening debt positions in 2025. Durant said that while the Caribbean region is on track for continued growth in 2025, several risks could alter this trajectory.

He mentioned geopolitical tensions internationally, adding that this, along with a resurgence of protectionist policies, could elevate uncertainty in global markets, disrupt supply chains, and exert upward pressure on commodity prices.

“Additionally, policy shifts in the United States, including evolving foreign policy priorities, add to the uncertainty of the outlook. Potential slowdowns in major trading partners, particularly the United States, could dampen demand for regional exports.”

Natural Hazards and Climate Change

Durant said that the region’s ever-present vulnerability to natural hazards remains a significant concern, noting that as climate change intensifies, extreme weather events increase. The risk of disruptions to economic activity grows.

“These natural hazards could not only disrupt economic activity but in some cases may reverse developmental gains and endanger fiscal and debt sustainability,” he said in the outlook that came nine months after the record-breaking Hurricane Beryl devastated parts of Grenada and St. Vincent and the Grenadine while impacting other Caribbean countries.

Development Imperatives

Regarding development imperatives, Durant said that for many CDB borrowing member countries, sustaining higher growth remains a challenge, burdened by persistent structural challenges.

“Yet higher growth is necessary to reduce poverty, bridge inequalities, and elevate the standard of living for all citizens and residents of this region. Higher growth is essential —not merely to endure, but to progress,” he told the media.

“The path forward demands bold action to address these challenges, build resilience, and seize inclusive and sustainable growth opportunities. To this end, the development imperatives for 2025 and the medium-term are clear.”

Building Resilience and Diversification

Echoing CDB President Daniel Best, who spoke earlier in the news conference, Durant said the region must build resilience to climate change and natural hazards.

“Hurricane Beryl’s devastation was a stark reminder of our region’s fragility. We must redouble efforts to climate-proof infrastructure, improve disaster preparedness, and integrate climate considerations into every facet of development planning,” Durant said, warning that the region must address its over-dependence on tourism for foreign exchange earnings.

“Achieving the necessary diversification requires us to build dynamic, internationally competitive economies,” he said, adding that the region needs to modernize its road and port infrastructure “in a coordinated way that allows us to trade among ourselves, build out potential regional supply chains and connect with international markets.

Conclusion

The CDB director of Economics told reporters that the region’s road ahead is challenging, “but it is also rich with promise.

“The Caribbean Development Bank is a steadfast partner to the region in this journey. We are committed to supporting our borrowing member countries as they pursue these imperatives, providing financial resources, technical expertise, and strategic guidance.”

He said that the CDB will publish a Caribbean Economic Review and Outlook in April 2025 as part of this commitment. It will provide deeper insights into the trends, challenges, and opportunities discussed at the media briefing.