Guyana’s oil boom powers Caribbean growth surge - World Bank says

Guyana’s oil boom powers Caribbean growth surge – World Bank says

Jan 14, 2026 News

(Kaieteur News) – Economic growth in the Caribbean is projected to accelerate sharply over the next two years, driven overwhelmingly by Guyana’s expanding oil sector, according to the World Bank’s latest Global Economic Prospects report.

The World Bank forecasts Caribbean growth of 5.2 percent in 2026 and 6.6 percent in 2027, largely reflecting Guyana’s continued oil-driven expansion. When Guyana is excluded, however, the subregion’s outlook is far more modest, with growth projected at 2.9 percent in 2026 and 3.7 percent in 2027, supported mainly by tourism and related services.

Among the region’s larger economies, the Dominican Republic is expected to grow by an average of 4.5 percent over the forecast period, buoyed by reforms aimed at attracting foreign investment and advancing export diversification. Jamaica’s growth outlook remains uneven, with a projected contraction of 2.3 percent in 2026, followed by a rebound to 3.7 percent in 2027, constrained by long-standing structural challenges and the pace of reconstruction following Hurricane Melissa. Haiti’s economy is forecast to return to growth of 2 percent in 2026 after seven consecutive years of contraction, contingent on modest improvements in security and political stability.

Slower Momentum Across Latin America and the Caribbean

Beyond the Caribbean, economic activity across Latin America and the Caribbean (LAC) slowed in the second half of 2025 amid heightened global uncertainty, coming in slightly below the World Bank’s June forecast. While goods trade showed some resilience, indicators such as industrial production and manufacturing and services purchasing managers’ indexes point to subdued momentum ahead.

For 2025 overall, private and public consumption and investment performed better than initially expected, though growth remained relatively weak. Stronger domestic demand was underpinned by higher-than-anticipated import growth, while exports stayed solid despite elevated trade tensions, particularly among commodity-exporting countries.

Inflation across most LAC economies remained within central bank target ranges in 2025. In Argentina, aggressive fiscal and monetary tightening significantly reduced inflation. Several countries—including Chile and Mexico—resumed monetary easing, while Brazil held its policy rate at 15 percent amid persistent inflation expectations. Capital flows to the region strengthened, easing financing pressures, though this was accompanied by widening current account deficits in some economies as currencies appreciated more sharply than in other regions. Sovereign bond issuance increased, spreads narrowed, and equity markets rallied in the second half of 2025 amid improving global financial conditions.

Outlook and Risks

Regional growth in LAC is projected to edge up to 2.3 percent in 2026 and 2.6 percent in 2027, supported by easing financial conditions, recovering trade flows, and improving domestic demand. However, these gains are expected to be partially offset by elevated trade tensions, limited fiscal space, and weak consumption and investment in several countries.

The World Bank cautioned that risks to the outlook remain tilted to the downside. Escalating trade barriers, a decline in commodity prices, tighter global financial conditions, or climate-related shocks could undermine exports, investment, fiscal revenues, and vulnerable sectors such as agriculture, fisheries, and energy. Despite these challenges, the report underscored that restoring stronger and more inclusive growth is essential for sustaining employment creation, improving job quality, and ensuring long-term economic resilience across the region—especially as Guyana continues to reshape the Caribbean’s growth landscape.

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Caribbean, Global Economic Prospects report, Growth, Guyana Oil, World Bank

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