Caribbean Economic Outlook 2026: $420B GDP, +3.4% Growth & Key Projections

The Caribbean region is poised for steady economic expansion in 2026, with combined GDP projected to reach approximately US$420 billion and average real growth of 3.4% across major economies. For historical economic indicators, explore our Caribbean Economic Data dashboard. Driven by a robust tourism recovery, transformative oil production in Guyana, resilient remittance flows exceeding US$22.5 billion, and accelerating foreign direct investment, the region's macroeconomic trajectory reflects both post-pandemic momentum and structural diversification efforts (IMF World Economic Outlook, October 2025; World Bank Caribbean Overview, 2025).

GDP Growth Projections by Country

Guyana continues to dramatically outpace all Caribbean economies with projected real GDP growth of 26.6% in 2026, driven by the rapid scaling of its Stabroek Block offshore oil production, which is expected to reach approximately 1.2 million barrels per day by late 2026 (IMF Article IV Consultation Guyana, 2025). This makes Guyana one of the fastest-growing economies globally for the fourth consecutive year.

The Dominican Republic, the Caribbean's largest economy by nominal GDP at approximately US$121 billion, is projected to grow at 5.1% in 2026, supported by strong construction activity, free trade zone exports, and an expanding tourism sector that attracted 10.8 million visitors in 2025 (Central Bank of the Dominican Republic, 2025; IMF WEO, 2025). Belize at 3.8% benefits from agricultural exports and tourism, while Barbados at 3.5% is driven by its post-pandemic tourism rebound and financial services sector (Caribbean Development Bank, 2025).

Jamaica is forecast to grow at 3.0%, with its logistics hub strategy, BPO sector expansion, and tourism arrivals exceeding 4.5 million visitors supporting the economy (STATIN Jamaica, 2025). Trinidad & Tobago at 2.8% reflects a moderate recovery in energy production and downstream petrochemical processing, though diversification into non-energy sectors remains a structural challenge (Central Bank of Trinidad & Tobago, 2025). The Bahamas at 2.4% is supported by tourism and ongoing resort development projects (IMF WEO, 2025).

Source: IMF World Economic Outlook, October 2025; World Bank Development Indicators, 2025. 2026P = projected. GDP per capita in current US dollars.

Inflation Forecasts: A Return Toward Stability

After peaking at an average of 7.6% across the Caribbean in 2022 due to post-pandemic supply chain disruptions and the Russia-Ukraine conflict's impact on food and energy prices, regional inflation has been steadily declining. The Caribbean average is projected to reach 3.1% in 2026, down from 4.3% in 2024 and 3.5% in 2025 (IMF World Economic Outlook, 2025). This represents a return toward historical norms, though still above the sub-3% levels seen in the pre-pandemic period.

Countries with US dollar pegs or currency board arrangements, including the Bahamas (2.1% projected), Barbados (2.5%), and the ECCU member states (2.3%), benefit from imported monetary stability. The Dominican Republic is expected to maintain inflation at 3.8%, within its central bank's target range (Central Bank of the Dominican Republic, 2025). Jamaica, which has successfully maintained single-digit inflation since its 2013 IMF program, is projected at 4.5% (Bank of Jamaica, 2025). Haiti remains the outlier with inflation projected at 22.5%, driven by currency depreciation, political instability, and supply disruptions (World Bank Haiti Overview, 2025).

Trade Balance & External Sector

The Caribbean's aggregate current account deficit is projected to narrow to approximately 4.2% of GDP in 2026, down from 5.8% in 2024, driven by strengthening tourism receipts and growing services exports (IMF WEO, 2025). The merchandise trade deficit remains substantial at an estimated US$38 billion, reflecting the region's structural dependence on imported food, fuel, and manufactured goods. Food imports alone account for approximately US$8.5 billion annually across the Caribbean, representing a significant vulnerability to global commodity price shocks (ECLAC, 2025).

Guyana is the notable exception, having transitioned from a current account deficit to a surplus driven by oil exports that are projected to generate US$7.8 billion in export revenue in 2026 (Bank of Guyana, 2025). Trinidad & Tobago also benefits from energy exports, though LNG and petrochemical revenues remain below their 2014 peaks. The Dominican Republic's free trade zones contribute approximately US$7.2 billion in exports, with medical devices, textiles, and tobacco as leading categories (CNZFE, 2025).

Foreign Direct Investment Trends

FDI inflows to the Caribbean are projected to reach US$16.1 billion in 2026, continuing a recovery trajectory that saw inflows rebound from a pandemic low of US$4.9 billion in 2020 to US$13.2 billion in 2024 (ECLAC Foreign Direct Investment in Latin America and the Caribbean, 2025). Guyana attracts the largest share, with an estimated US$5.8 billion in FDI directed primarily toward oil and gas exploration, production infrastructure, and associated services (ECLAC, 2025).

The Dominican Republic follows with approximately US$4.2 billion in projected FDI, concentrated in tourism resort development, real estate, and manufacturing free trade zones (Central Bank of the Dominican Republic, 2025). Jamaica is expected to attract US$1.8 billion, with investments in logistics (Kingston Freeport Terminal), BPO operations, and renewable energy projects (JAMPRO, 2025). Barbados, the Bahamas, and Trinidad & Tobago each attract US$0.8 billion to US$1.2 billion annually, with tourism, financial services, and energy sector investments as primary drivers (IDB, 2025).

Tourism Recovery & Growth

Tourism remains the Caribbean's dominant economic sector, contributing approximately 28% of regional GDP directly and indirectly and employing an estimated 2.4 million people (World Travel & Tourism Council, 2025). Total visitor arrivals across the Caribbean are projected to reach 35.2 million in 2026, surpassing the pre-pandemic record of 32.6 million set in 2019 by approximately 8% (Caribbean Tourism Organization, 2025).

The Dominican Republic leads in absolute visitor numbers with a projected 11.4 million arrivals in 2026, followed by Puerto Rico at 5.2 million, Jamaica at 4.8 million, the Bahamas at 3.6 million, and Barbados at 1.1 million (CTO, 2025). Cruise passenger arrivals, which represent a separate and significant tourism segment, are projected to reach 36 million port calls across the Caribbean in 2026, with Cozumel, Nassau, and St. Thomas as the busiest ports (Florida-Caribbean Cruise Association, 2025).

Average daily visitor spending has increased to approximately US$182 per day for stopover tourists in 2025, up from US$161 in 2019, driven by a shift toward higher-end accommodations and experiential tourism (CTO, 2025). Total tourism receipts across the Caribbean are projected at US$46.3 billion in 2026, compared to US$38.1 billion in 2019 (World Bank, 2025).

Remittances: A Critical Economic Lifeline

Remittance inflows to the Caribbean are projected to reach US$22.5 billion in 2026, maintaining their position as one of the region's most important sources of external financing (World Bank Migration and Development Brief, 2025). For several Caribbean economies, remittances exceed FDI and official development assistance combined, representing a critical household income supplement that supports consumption, housing investment, and educational expenditure.

The Dominican Republic receives the largest absolute remittance volume at approximately US$10.4 billion, equivalent to roughly 8.6% of GDP (Central Bank of the Dominican Republic, 2025). Jamaica follows at US$3.6 billion, representing approximately 19.1% of GDP, one of the highest remittance-to-GDP ratios in the Western Hemisphere (Bank of Jamaica, 2025). Haiti receives approximately US$4.1 billion, equivalent to a remarkable 22.8% of GDP, making remittances the single most important source of foreign exchange (World Bank, 2025). Guyana at US$0.7 billion (2.6% of GDP), Trinidad & Tobago at US$0.5 billion, and Barbados at US$0.3 billion complete the major recipient markets (World Bank, 2025).

Debt-to-GDP & Fiscal Position

Average public debt across the Caribbean stands at approximately 68.4% of GDP, down from a pandemic peak of 82.1% in 2020 but still well above the 60% threshold generally considered sustainable for developing economies (IMF WEO, 2025). The debt reduction trajectory has been supported by GDP growth, fiscal consolidation efforts, and in some cases debt restructuring agreements.

Barbados has made significant progress under its IMF-supported restructuring program, reducing its debt-to-GDP ratio from 158% in 2018 to approximately 108% by 2025 (IMF Article IV Consultation Barbados, 2025). Jamaica has also demonstrated fiscal discipline, reducing debt from 144% of GDP in 2013 to approximately 72% in 2025 through consistent primary surpluses (IMF, 2025). Suriname is in the process of debt restructuring following its 2020 default, with debt-to-GDP at approximately 120% (IMF, 2025). The ECCU member states average approximately 65% debt-to-GDP, though individual members like Dominica and Grenada have achieved notable reductions through fiscal reforms and Citizenship by Investment revenues (ECCB, 2025).

Source: IMF World Economic Outlook, October 2025; World Bank Development Indicators, 2025; Central banks of respective countries. 2026 projected values.

Sector Analysis: Key Industries Driving Growth

Tourism & Hospitality (28% of Regional GDP)

The tourism sector's contribution to Caribbean GDP is projected to reach US$117.6 billion in 2026, encompassing direct tourism spending, supply chain impacts, and induced consumption effects (WTTC, 2025). For a detailed breakdown of tourism sector dynamics, see our Caribbean Tourism & Hospitality Trends analysis. Hotel development pipelines include approximately 22,000 rooms under construction or in advanced planning across the region, with major investments from Marriott, Hyatt, Sandals, and Spanish chains including Meliá and Barceló (STR Global, 2025). Average hotel occupancy rates across the Caribbean reached 72.4% in 2025, with ADR (average daily rate) at US$298, both above pre-pandemic levels (STR Global, 2025).

Energy & Mining (15% of Regional GDP)

The energy sector's contribution is increasingly dominated by Guyana's oil production, which is projected to generate approximately US$7.8 billion in export revenues in 2026 (Bank of Guyana, 2025). Trinidad & Tobago's LNG exports remain significant at approximately US$5.2 billion, though production has declined from peak levels (Central Bank of Trinidad & Tobago, 2025). The renewable energy transition is accelerating, with Caribbean-wide installed renewable capacity projected to reach 4.8 GW by 2026, up from 2.1 GW in 2020, with Jamaica, Barbados, and the Dominican Republic leading solar and wind deployments (IRENA, 2025).

Agriculture & Agribusiness (10% of Regional GDP)

Caribbean agricultural output is projected at approximately US$14.2 billion in 2026, with the sector employing an estimated 1.1 million people (FAO, 2025). Key export commodities include Dominican Republic tobacco and cacao (US$1.8 billion combined), Jamaican coffee, rum, and sugarcane products (US$0.9 billion), and Belizean citrus and sugar (US$0.4 billion) (ITC Trade Map, 2025). Food security remains a challenge, with the region importing approximately 60% of its food requirements at a cost exceeding US$8.5 billion annually (ECLAC, 2025). CARICOM's 25 by 2025 initiative, aimed at reducing the food import bill by 25%, has driven increased investment in greenhouse agriculture, aquaponics, and agri-tech across member states (CARICOM Secretariat, 2025).

Fintech & Digital Services (5% of Regional GDP, Growing)

The Caribbean fintech sector is experiencing rapid growth, with the digital payments market projected to reach US$18.6 billion in transaction value by 2026, up from US$11.2 billion in 2023 (IDB Fintech in LAC Report, 2025). Mobile money adoption has reached approximately 34% of the adult population across the Caribbean, driven by the Bahamas' Sand Dollar CBDC, Jamaica's JAM-DEX, and the ECCU's DCash pilot (Caribbean Development Bank, 2025). The BPO and digital services sector, particularly strong in Jamaica, the Dominican Republic, and Barbados, is projected to generate US$3.8 billion in revenue and employ approximately 145,000 people in 2026 (IDB, 2025).

Risks & Downside Scenarios

The Caribbean's economic outlook faces several significant downside risks. Climate vulnerability remains the most acute, with the region experiencing average annual economic losses of 2% to 5% of GDP from hurricanes, flooding, and coastal erosion (Caribbean Development Bank, 2025). The 2024 hurricane season caused an estimated US$12.8 billion in total damages across the region, underscoring the persistent threat to infrastructure, tourism assets, and agricultural production (ECLAC Disaster Assessment, 2025).

A potential slowdown in the US economy, the source of approximately 50% of Caribbean tourist arrivals and 70% of remittance flows, would have cascading effects across the region (World Bank, 2025). Global monetary tightening could increase borrowing costs for Caribbean sovereigns, many of which face refinancing needs in 2026-2028 (IMF, 2025). Commodity price volatility, particularly for imported food and fuel, poses inflation risks that could erode consumer purchasing power and widen current account deficits. Additionally, the potential for de-risking by international correspondent banks continues to threaten Caribbean financial institutions' access to the global payments system (Caribbean Association of Banks, 2025).

Opportunities & Upside Catalysts

Several structural opportunities could drive above-consensus growth. Guyana's oil production scaling could generate GDP spillover effects across the Caribbean through increased trade, investment, and labor migration (IDB, 2025). The nearshoring trend is creating opportunities for Caribbean countries to attract manufacturing and services investment as companies diversify supply chains away from Asia, with the Dominican Republic and Jamaica as primary beneficiaries (IDB Nearshoring Report, 2025).

The renewable energy transition represents a US$12 billion investment opportunity across the Caribbean through 2030, with the potential to reduce energy costs by 30% to 50% and improve competitiveness (IRENA, 2025). The blue economy, encompassing sustainable marine resources, aquaculture, and ocean-based tourism, is estimated at US$450 billion in potential value across the Caribbean Basin, with significant untapped potential in most island states (World Bank Blue Economy Report, 2025). Digital transformation and the growth of remote work are also creating new economic opportunities, with several Caribbean nations launching digital nomad visa programs that have attracted an estimated 45,000 long-term visitors generating approximately US$2.1 billion in annual spending (CTO, 2025).

Methodology & Data Sources

This economic outlook draws on data from the IMF World Economic Outlook (October 2025), World Bank Development Indicators (2025), ECLAC Economic Survey of Latin America and the Caribbean (2025), Caribbean Development Bank Annual Report (2025), Inter-American Development Bank (IDB) country assessments, central bank reports from individual Caribbean nations, the Caribbean Tourism Organization (CTO) statistical bulletins, and the World Travel & Tourism Council (WTTC) economic impact reports. Projections for 2026 (denoted as 2026P) reflect consensus forecasts from these multilateral institutions as of Q4 2025. All monetary values are in current US dollars unless otherwise specified.