CDB urges decisive action on high debt in Caribbean

Oct 30, 2025 News

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…says debt sustainability an urgent development priority

(Kaieteur News) – The Caribbean Development Bank (CDB) is calling on Caribbean governments and development partners to take bold, coordinated action to confront the twin challenges of stubbornly low growth and persistently high debt across the region.

Speaking at the 2nd Caribbean Debt Forum, Ian Durant, Acting Vice-President (Finance and Corporate Services) of the CDB, outlined a comprehensive set of policy recommendations aimed at promoting inclusive and sustainable growth, boosting competitiveness, and strengthening fiscal resilience through decisive debt management. According to CDB press release, Durant pointed to recent macroeconomic data and regional assessments that paint a sobering picture: the Caribbean’s growth trajectory remains weak, undermined by low productivity, narrow export bases, and high exposure to climate shocks. These deep-rooted structural issues, he warned, continue to restrict fiscal space and hinder the region’s long-term development prospects.

“The Caribbean’s growth trajectory has been constrained by high export concentration and structural rigidities, which have led to low and volatile growth,” Durant said. “To unlock our full potential, we must invest in building competitive, diversified economies that can withstand external shocks and deliver inclusive growth.”

While regional debt ratios have improved since the pandemic, Durant cautioned that eight of the Bank’s Borrowing Member Countries (BMCs) still exceed the 60 per cent debt-to-GDP benchmark. Rising global interest rates and slowing nominal GDP growth, he noted, threaten to erode these fragile gains, making debt sustainability an urgent development priority.

“Debt sustainability is not just a fiscal issue, it is a development imperative,” Durant stressed. “CDB remains committed to supporting member countries through innovative financing, technical assistance, and policy dialogue to help them build resilience and achieve lasting prosperity.”

Here in Guyana, experts and politicians have warned the Guyana Government about excessive borrowing on the back of its oil revenues.  Only recently the United Kingdom increased its export credit financing limit for Guyana from £2.1 billion to £3.0 billion, a move billed by both London and Georgetown as a vote of confidence in Guyana’s accelerating economic progress.

But amid the applause, commentators have here have sharply warned that Guyana must tread carefully. Failure to do so, they say, risks plunging the country into a debt trap, especially given the volatility of oil prices and the nation’s already heavy external and domestic obligations. Guyana’s total Public and Publicly Guaranteed (PPG) debt stood at US$5.993 billion at the end of 2024, up from about US$4.5 billion a year earlier. External PPG debt loans from multilateral, bilateral, and other foreign creditors was roughly US$2.2 billion, while domestic PPG debt reached approximately US$3.7 billion. Debt servicing costs also climbed to US$196.1 million in 2024, up from US$177.5 million the year before. Of that, US$124.9 million went to external debt service and US$71.2 million to domestic obligations. Government officials, however, frequently point to Guyana’s declining debt-to-GDP ratio, down from 47.4% in 2020 to 24.3% in 2024, as evidence that debt levels remain within prudent limits and that the country has room to borrow for strategic projects.

Meanwhile, Durant also underscored the untapped potential of the Caribbean Single Market and Economy (CSME) to drive regional trade and growth. However, he said the benefits of integration continue to be hampered by outdated port infrastructure, weak shipping connectivity, and high logistics costs. A recent CDB logistics study revealed persistent inefficiencies, including paper-based systems, outdated fee structures, restrictive labour practices, and limited port operating hours—all of which constrain competitiveness and productivity.

To tackle these bottlenecks, Durant urged governments to strengthen entrepreneurial ecosystems and modernise regulatory frameworks to make it easier for the private sector to invest and expand. He also emphasised the need for greater investment in climate-resilient infrastructure, digital transformation, and innovation-driven growth, all supported by expanded access to concessional financing and coordinated regional partnerships.  “We must act together to transform the region’s economic landscape—by reforming outdated systems, embracing innovation, and ensuring that growth is inclusive and sustainable,” Durant said. As the region faces mounting global and environmental headwinds, Durant reaffirmed that the CDB remains a steadfast partner in advancing the Caribbean’s development agenda and helping its member countries navigate complex fiscal and economic challenges.

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• Caribbean, Caribbean Development Bank, high debt, Ian Durant

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