World Bank Highlights Diverging Caribbean Growth Outlook

• Latin America and the Caribbean is projected to grow by 2.2% in 2026, broadly in line with the 2.4% recorded in 2025. Within the Caribbean, the outlook remains sharply divided between faster-growing resource-rich economies and tourism-dependent islands experiencing a more moderate recovery.
• Trinidad and Tobago’s economy is projected to contract by 0.2% in 2026, following a 0.5% decline in 2025, before returning to growth of 2.5% in 2027. The country maintains a steadier, mature natural gas production profile. By contrast, Saint Lucia is forecast to grow by 1.1% in 2026, following an estimated 0.6% contraction in 2025, with growth expected to strengthen to 2.1% in 2027. Saint Lucia’s 2025 contraction reflected weaker tourism, with stayover arrivals declining by 2.1%.
• Guyana’s oil-driven expansion continues to lift sub-regional growth, with the economy projected to expand by 23.7% in 2026 and 18.7% in 2027. Meanwhile, Suriname is projected to grow by 3.9% in 2026, supported by accelerating investment tied to offshore discoveries ahead of its expected transition to offshore oil production in 2028.
• Growth is expected to remain more moderate across several tourism-dependent Caribbean economies, reflecting high import and energy costs and climate-related vulnerabilities, although the factors vary by country. The Bahamas and Barbados are projected to grow by 3.0% and 2.0%, respectively, in 2026, while Jamaica is expected to contract by 0.8%. In The Bahamas, gains in cruise tourism and construction are being partly offset by hotel-capacity bottlenecks, while Barbados’ growth is expected to moderate as fiscal consolidation continues.
• Risks to the wider regional outlook remain tilted to the downside, with energy price volatility potentially stalling disinflation and keeping central banks cautious, while high debt and interest burdens constrain fiscal space and investment. El Niño could also disrupt agriculture and hydropower and place further pressure on food and energy prices.
• The World Bank identified artificial intelligence (AI) as a potential new source of productivity and economic growth. Its near-term impact is expected to be concentrated in cognitive work, with AI potentially enhancing around 8% of jobs and exposing roughly 10% more to automation.
• Although average regional growth remains modest, the World Bank noted that diverging country paths show that stronger performance is possible. Guyana’s rapid oil-led expansion and Suriname’s accelerating offshore investment contrast with softer growth across several tourism-dependent economies. Suriname’s expected transition to oil production in 2028 could widen this divergence further, while slower-growing economies remain more exposed to energy costs, high debt burdens and climate-related shocks.

(Sources: World Bank, Trinidad and Tobago Guardian & St. Lucia Times)