Caribbean Market Overview: An Economic Review for Investors

Interested in an economic overview of the Caribbean Market? We provide the latest detailed information for Corporate and Investment clients in our quarterly review.

You can download the latest edition Caribbean Market Overview July 2025 >.

or read the Caribbean Economic Overview & Caribbean Market Review summaries  for a synopsis.

We encourage you to contact a Relationship Manager if you have any queries on Investment Banking in the Caribbean. Our team of experts is ready to assist.

Caribbean Economic Overview

Summary:

After intensifying to an extraordinary high in April, global trade tensions eased somewhat since then, as the US rolled back several of the harshest reciprocal tariff measures to allow for trade negotiations. US-China trade talks continued following the post-escalation tariff truce agreed on May 12, which is set to expire on August 12. The 90-day freeze on higher tariffs imposed on most other countries facilitated a temporary reduction to the new baseline 10% tariff, allowing deals to be brokered with a few trading partners including the UK, Vietnam, Indonesia, Japan and the EU. However, several countries, including Canada and Mexico, remained without a trade agreement leading up to the August 1 deadline, originally set for July 9. Meanwhile, Israel’s surprise attack on Iran in June and subsequent retaliatory strikes spawned a dramatic escalation of geopolitical tensions, accompanied by a notable jump in oil prices. US military intervention sparked fears of a dangerous spiral, but tensions receded shortly afterward, following the US announcement of a ceasefire. Despite these headwinds, advance estimates suggest that US real GDP growth outperformed initial expectations in Q2, but largely reflected a dialing back of imports after aggressive stockpiling in Q1 ahead of anticipated higher prices. Additionally, global disinflation progress appears to have stalled, with US inflation in particular creeping upward to 2.7% y/y in June, likely signaling initial pass-through from the higher tariffs.

Meanwhile, the latest round of US tariff adjustments suggest that most Caribbean countries will continue to face the minimum blanket 10% tariff. However, spillover consequences of elevated uncertainty in the region’s largest trading partner have likely started to bite for tourism dependents. Stay-over arrivals to the region1 rose 1.1% y/y in Q1 2025 as declines to a few markets substantially offset the ongoing rebound and post-recovery expansion in others. Latest available data for the year-to-date suggest reduced arrivals to Grenada, St. Lucia, Turks and Caicos Islands, The Bahamas, and Jamaica. However, arrivals to The Bahamas and Jamaica had already displayed signs of weakening in 2024, the latter partly attributed to an adverse US travel advisory, which was only upgraded in May 2025. Further, following a positive performance over the first four months of the year, arrivals to Cayman Islands and Belize declined in May and June limiting the outturn over the six-month period. Cruise tourism posted a slightly stronger performance, as arrivals to quite a few markets have not yet returned to pre-pandemic levels. Passenger arrivals to the region1 climbed 6.7% y/y in Q1, led by visitors to The Bahamas, Turks and Caicos Islands and Barbados. However, arrivals to Jamaica, Aruba, Curaçao, and St. Lucia fell y/y during the quarter.