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 2024 >.

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:

Despite the threat of broadening geopolitical and geoeconomic tensions, the global economy remained buoyant in the first half of 2024. Russia’s relentless invasion of Ukraine continued, the Middle East conflict escalated, and signs of increased trade fragmentation among some of the larger economies emerged. Notwithstanding these developments, global economic growth remained stable, albeit with some divergence across major economic groupings, while global disinflation progressed, and major central banks began to ease monetary policy. Among the region’s major trading partners, US real GDP grew at an annualized rate of 3.0% in Q2 up from 1.6% in Q1, while UK real GDP growth came in at 0.5% in Q2 following 0.7% growth in Q1. Meanwhile, US inflation slowed to 2.5% in August heralding the Fed’s 50bps rate cut in September, while UK inflation fell below target to 1.7% in September, following the Bank of England’s 25bps rate cut in August. However, uncertainty in energy markets increased as OPEC+ production cuts, tensions in the Middle East, and growing global demand placed upward pressure on oil prices, but strong non-OPEC+ supply growth kept prices somewhat contained over the ten months to October 2024.

Economic activity in the Caribbean advanced at a moderate pace thus far in 2024, as output in most markets already completed their recovery cycles following the COVID-19 pandemic. Tourism remained the primary engine of expansion, fuelling greater transport and distribution output, while robust construction activity, largely linked to the accommodation sector, also continued to buttress growth. After topping 2019’s performance in 2023, stay-over arrivals to the region1 rose 6.2% y/y during H1 2024, supported by the hosting of the ICC Men’s T20 World Cup. However, recovery paths of individual markets diverged as arrivals to Barbados, Belize, Antigua and Barbuda, and St. Lucia surpassed pre-pandemic levels after falling short in 2023, but arrivals to arrivals to a few markets, namely Cayman Islands, Dominica, and St. Kitts and Nevis remained below. Cruise passenger arrivals continued to advance, growing 9.2% y/y and 11.9% relative to H1 2019, but this positive performance was heavily skewed as arrivals to most markets remained below pre-pandemic levels. Further, arrivals to some markets including Grenada, St. Kitts and Nevis, St. Vincent and the Grenadines, Belize, Sint Maarten, and Cayman Islands, declined during the half-year reversing recovery progress. Meanwhile, booming oil production flanking sustained growth of non-oil output continued to inflate the Guyanese economy during the first half of 2024, but delayed recovery of the energy sector likely stifled the economic performance of Trinidad and Tobago.