PARIS, 31 May. - (ANA) - More than 2% of GDP. That's the estimated economic cost of climate-related damages to Caribbean economies over the past four decades, underscoring just how exposed the region is to growing environmental shocks.

 

The key to protecting its populations and economic assets? More and better investment. Discover how the region can unlock sustainable growth for a more resilient tomorrow in Caribbean Development Dynamics 2026.

 

 

 

 

Boosting investment is central to advancing resilient and sustainable development in Caribbean countries.  While the region is well positioned to leverage its comparative advantages, realising this potential requires addressing persistent structural constraints and actively seeking innovative financing opportunities. The Caribbean combines valuable natural and human capital with a strong integration into global markets, alongside small-scale market size, rising exposure to climate and external shocks, limited fiscal space, high financing costs and enduring infrastructure deficits. Responding to this complex set of opportunities and challenges calls for a renewed investment agenda centred on resilience and sustainability. The OECD Development Centre and the Inter-American Development Bank (IDB) continue to strengthen their engagement with the region, including through the IDB ONE Caribbean programme, a dedicated regional initiative to foster cooperation, leverage resources and deliver impact at scale.

 

 

 

 

The Caribbean faces complex environmental and socio-economic challenges. The region is increasingly exposed to climate hazards despite contributing minimally to global greenhouse gas emissions. Climaterelated extreme weather events increased by 84% in 2004-2024 compared to the previous two decades, generating average annual damages equivalent to 2.13% of GDP in the last four decades. Macroeconomic conditions further weigh on resilience. Potential GDP per capita growth is modest, estimated at 1.4% in

2025, below advanced economies (1.8%), reflecting persistently low productivity, at around 40% of OECD levels.

 

High public debt is another constraint, averaging 68.6% of GDP in 2024, 14.5 percentage points above the Latin American average and almost four percentage points higher than in 2014. Economic structures remain largely service-oriented and insufficiently diversified at the sector level, which compounds their vulnerability. Services account for 63% of total exports, mainly tourism, which is on average 71% of total services exports. The few commodity exporters in the region rely mostly on oil-driven merchandise exports (over 80% of exports). Social challenges remain important: on average one-quarter of the population lives below the poverty line, and more than six out of ten people live in households depending solely or partially on informal work.   - (ANA) -

 

 

To download the full report, visit: https://www.oecd.org/content/dam/oecd/en/publications/reports/2026/02/caribbean-development-dynamics-2026_f2a57eab/5c92507d-en.pdf

 

AB/ANA/30 May 2026  - - -