ECLAC Lowers 2026 growth forecast as Caribbean faces uncertain conditions

GREAT BAY--The Economic Commission for Latin America and the Caribbean has lowered its 2026 growth outlook for Latin America and the Caribbean, warning that the region is entering another year of limited economic dynamism amid geopolitical tensions, higher oil and food prices, weaker global trade, and tighter financial conditions.

According to updated projections released by ECLAC, the economies of Latin America and the Caribbean are expected to grow by 2.2 percent in 2026, a slight downward revision from the 2.3 percent forecast issued in December 2025. ECLAC said the region is facing a more difficult external environment, including increased geopolitical tensions, global inflation pressures and less favorable financial conditions.

For the Caribbean, the headline number appears stronger than the wider regional average. ECLAC projects growth of 5.6 percent in the English- and Dutch-speaking Caribbean in 2026, slightly above the 5.5 percent recorded in 2025. However, the commission made clear that this figure is heavily influenced by Guyana’s continued high-growth trajectory. Excluding Guyana, the Caribbean’s projected growth falls sharply to 1.2 percent in 2026, down from 2.0 percent in 2025.

This distinction is especially important for the Dutch Caribbean and other small tourism-driven economies, where growth remains vulnerable to external shocks, imported inflation, airlift costs, energy prices, interest rates and global travel demand. While ECLAC’s country table does not provide individual projections for St. Maarten, Aruba, Curaçao or the Caribbean Netherlands, it does include the English- and Dutch-speaking Caribbean as a subregional grouping and lists Suriname separately, with Suriname projected to grow from 3.2 percent in 2025 to 3.9 percent in 2026.

ECLAC’s updated table shows mixed performance across the Caribbean. Guyana is projected to grow by 16.3 percent in 2026, the strongest forecast in the subregion, while several tourism-dependent economies are expected to post more modest growth. The Bahamas is projected at 2.2 percent, Barbados at 2.5 percent, Belize at 2.5 percent, Dominica at 3.0 percent, Grenada at 4.0 percent, Saint Lucia at 3.0 percent, and Trinidad and Tobago at 0.8 percent. Jamaica is projected to contract by 1.0 percent.

The projections underscore the challenges facing small island economies such as St. Maarten, where economic performance is closely tied to tourism, consumer spending, import costs and global transportation conditions. ECLAC noted that growth across the wider region is being constrained by less dynamic private consumption, while employment growth is expected to remain moderate at around 1.1 percent in 2026 compared to 1.5 percent in 2025. Inflation is also expected to increase, with the regional median forecast rising above 3 percent in 2026.

The commission also warned that risks remain tilted to the downside. These include continued restrictive financial conditions, energy and food price pressures, volatility in international markets, vulnerability to external shocks, and weak domestic demand in several economies. ECLAC said structural factors such as limited policy space, institutional weaknesses and external restrictions could also affect economic performance in some countries.

For the Dutch Caribbean, the report serves as another reminder that headline Caribbean growth figures can mask very different realities among islands and countries. The high-growth performance of Guyana, driven largely by its oil sector, lifts the subregional average, while smaller service-based economies continue to face the more difficult task of building resilience, strengthening public finances, expanding investment and protecting households and businesses from imported price pressures.

ECLAC said the current outlook points to the need for stronger domestic growth drivers, increased productivity, greater investment, improved governance and stronger macroeconomic resilience as the international environment becomes more uncertain.

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