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 October 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:

The world economy remained resilient thus far in 2025, despite shifting global trade dynamics and persistent geopolitical instability. Following sweeping new tariff announcements by the US and retaliatory actions by major trading partners early in the year, the US negotiated trade deals with several countries, but reverted to higher tariff rates for those unable to reach an agreement. While US effective tariff rates have declined relative to April’s high, they remain noticeably above 2024’s level. Meanwhile, a US-brokered ceasefire halted the 12-day Israel-Iran conflict that dramatically escalated following Israel’s attack on Iran in June. However, the war in Ukraine continued relentlessly despite a few attempts at securing a peace deal. Notwithstanding the heightened policy and geopolitical uncertainty, global economic activity held up in H1 2025, though most recent data point toward some slowing. In the US, the region’s largest trading partner, real GDP advanced at an annualised rate of 3.8% in Q2, largely reflecting reduced imports after stockpiling in Q1, partly offset by lower exports and investment. Since then, the US labour market displayed signs of weakening – job gains slowed and the unemployment rate edged up to 4.3% in August – prompting the Federal Reserve to cut interest rates by 25bps in September and October, even though inflation continued to trend higher. Specifically, US inflation rose to 3.0% y/y in September 2025 from 2.4% y/y one year earlier, remaining above target but exhibiting limited signs of tariff impact.

Economic activity in the Caribbean generally maintained a positive growth trajectory. However, the pace of tourism expansion softened reflecting post-recovery normalization in most territories, alongside airlift capacity constraints and elevated uncertainty in major source markets. Growth in stay-over arrivals to the region1 decelerated to 2.1% y/y during H1 2025, while outbound travel from the US – the largest source market – to the Caribbean slowed sharply to 0.3% y/y during January to June relative to 9.9% growth one year earlier. Further, latest available data for the year-to-date indicate that stay-over arrivals declined y/y in Grenada, St. Lucia, The Bahamas, Jamaica and Turks and Caicos Islands. However, arrivals to all other markets increased, with St. Kitts and Nevis, St. Vincent and the Grenadines, Curaçao and Sint Maarten posting double-digit percentage growth. Cruise passenger arrivals to the region1 climbed 6.6% y/y at June 2025 dominated by increased visitors to The Bahamas, Barbados, Turks and Caicos Islands, Sint. Maarten and St. Kitts and Nevis. However, arrivals to St. Lucia, Antigua and Barbuda, Jamaica, Aruba, and Curaçao contracted. Following a modest decline overall for 2024 partly attributed to the impact of Hurricane Beryl, economic activity in Jamaica advanced y/y during H1, but real GDP in Trinidad and Tobago fell 2.5% y/y in Q1, reflecting lower output of both the energy and non-energy sectors.