Caribbean Economies to Grow 2.5% in 2025, but Outlook Varies by Country  

• The International Monetary Fund (IMF) yesterday predicted that economic growth in Latin America and the Caribbean would slow to 2.2% in 2025 and recover to 2.4% the following year.
• Excluding Guyana, the economies of Caribbean countries are projected to expand by 2.5% in 2025, but prospects vary across countries, with some anticipating a more robust expansion than others. Tourism and construction activity are expected to remain key drivers of growth. However, the region faces challenges, including the impact of natural hazards, with some countries still below pre-pandemic output levels.
• The projection comes as the Washington-based financial institution projected that global growth will be 3.0% this year and 3.1% in 2026. This new forecast for 2025 is an increase of 0.2 percentage points compared to the reference forecast in the April 2025 World Economic Outlook (WEO), while the outlook for 2026 is up by 0.1 percentage points.
• 'Global growth has been revised up to 3% in 2025 and 3.1% in 2026, reflecting stronger-than-expected front loading in international trade, lower tariff rates compared to early April, and easier financial conditions, including a weaker US dollar and fiscal expansion in some jurisdictions. 'Still, projections remain about 0.2 percentage points below our pre-April 2nd forecasts, indicating that the trade tensions are hurting the global economy. Global inflation continues to decline, reaching 4.2% in 2025 and 3.6% in 2026,' said Pierre-Olivier Gourinchas, the IMF's chief economist.

(Source: International Monetary Fund, Caribbean Media Corporation)