Central America and Caribbean Economic Outlook
Our panelists have broadly maintained their regional GDP growth forecast for 2025 this year, seeing a slight uptick from 2024’s projection. Accelerating exports will underpin the improvement, while private spending and investment will remain robust. That said, risks are tilted to the downside due to Trump’s radical trade and migration policy proposals.
Central America and Caribbean Inflation
In September, regional inflation fell to an over three-year low, and cooled further in most economies in October. Our Consensus is for price pressures to average slightly above 2024’s forecast in 2025 on prior interest rate cuts. Unexpected currency depreciations and a severe La Niña weather pattern are upside risks.
This chart displays Economic Growth (Real GDP, ann. var. %) for Central America and Caribbean from 2010 to 2023.
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| 3.2 | - | - | 4.5 | - | |
| Public Debt (% of GDP) | 49.7 | 62.4 | 58.4 | 54.8 | - |
| International Reserves (USD bn) | 61.6 | 74.2 | 80.4 | 79.3 | 86.9 |
| Merchandise Imports (USD bn) | 130.9 | 107.4 | 145.6 | 180.4 | 168.5 |
| Unemployment (% of active population, aop) | 7.7 | 11.2 | 8.9 | 7.2 | 6.1 |
| GDP per Capita (USD) | 5,885 | 5,448 | 6,078 | 6,729 | 7,230 |
| Economic Growth (Real GDP, ann. var. %) | 2.2 | -7.3 | 7.7 | 4.6 | 3.2 |
| 1.2 | - | - | 5.6 | - | |
| Fiscal Balance (% of GDP) | -3.1 | -7.5 | -3.8 | -2.1 | - |
| Inflation (CPI, ann. var. %, aop) | 2.1 | 2.1 | 3.9 | 7.6 | 5.3 |
| Policy Interest Rate (%, eop) | 3.57 | 2.06 | 2.46 | 6.35 | 5.66 |
| Current Account Balance (% of GDP) | -0.3 | 0.4 | - | -1.7 | -0.6 |
| Merchandise Exports (USD bn) | 79.6 | 70.2 | 93.5 | 112.1 | 101.3 |
| External Debt (% of GDP) | 63.7 | 73.6 | 68.1 | 64.1 | 61.3 |