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Iran conflict could benefit Caribbean commodity exporters, hurt tourism economies – CDB
External shocks stemming from geopolitical tensions involving the United States, Israel and Iran have already pushed commodity prices upward, creating a mixed outlook for Caribbean economies. This is according to the Caribbean Development Bank’s (CDB) acting deputy director of economics, Jason Cotton.
During the bank’s annual news conference last week in Barbados, Cotton presented a review of the bank’s 2025 performance and the economic outlook for 2026.
Caribbean Development Bank (CDB) Acting Deputy Director of Economics, Jason Cotton
He noted that in 2025, Caribbean economies recorded slower growth amid intensifying global uncertainty, climate shocks, and fiscal pressures. Cotton noted that excluding Guyana, regional growth slowed to 0.6% in 2025, down from 1.4% in 2024. When Guyana is included, overall growth reached 4.7%. For this year, the bank projects that growth across the Caribbean will remain modest. Cotton noted that excluding Guyana, regional GDP is forecasted to grow by 1.1%, while Guyana is expected to expand by over 20%, lifting regional growth to 6.2% when included.
Responding to questions about potential external risks to the region, Cotton acknowledged that the situation remains highly uncertain but said recent developments have already pushed commodity prices upward. “In terms of the conflict in Iran, what we have already seen is that there has been an uptick in commodities prices, higher than we have seen in the recent past,” Cotton said.
He noted that commodity-exporting Caribbean countries such as Guyana could see higher export earnings as a result of geopolitical tensions, but spells danger for service dependent economies across the region, as rising energy and food costs could simultaneously drive inflation, increase the cost of doing business and potentially dampen tourism.
“Now what that means is for our commodity exporting countries that would be a positive upside because of course they export commodity, but majority of our member countries are service exporting countries and as a result that increase in prices would have implications on inflation, it will have implication on growth, it will have implications potentially on tourism demand,” he explained.
Cotton cautioned that the full impact of the conflict on Caribbean economies remains unclear and will depend on how long the situation persists.
When asked how soon Caribbean citizens could begin feeling the effects through higher living costs or reduced tourism arrivals, Cotton said predicting a timeline would be difficult given the number of variables involved.
The CDB economist reminded that global commodity markets have already shown signs of volatility. He added, “But what I can assure you, is that there would be if it continues to manifest in this way, and we’ll have to monitor the situation first that’s the best I can give you and we are monitoring the situation.”
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