By: Staff Writer
April 24, 2026
The Inter-American Development Bank (IDB) in partnership with the Organisation of Economic Cooperation and Development (OECD) said in a recent report that climate related extreme weather events increased by 84 percent in 2004-2024 compared to the previous two decades, generating average annual damages equivalent to 2.13 percent of GDP in the last four decades
The report, Caribbean Development Dynamics 2026, also said: “Macroeconomic conditions further weigh on resilience. Potential GDP per capita growth is modest, estimated at 1.4 percent in 2025, below advanced economies (1.8 percent), reflecting persistently low productivity, at around 40 percent of OECD levels. High public debt is another constraint, averaging 68.6 percent 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 percent of total exports, mainly tourism, which is on average 71 percent of total services exports. The few commodity exporters in the region rely mostly on oil-driven merchandise exports (over 80 percent 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.”
A further release on the IDB’s website said: “Greater investment is needed for Caribbean countries to strengthen resilience, close infrastructure gaps and achieve sustainable growth.
“The main findings of the second edition of the Caribbean Development Dynamics Report 2026: Investing in Sustainable and Resilient Development was central in the discussions among regional leaders, economists, policymakers, and international partners in Port of Spain, Trinidad and Tobago, during the ONE Caribbean Ministerial Dialogue on April 21. The event facilitated regional dialogue and generated actionable recommendations for IDB member states and the wider region.
“The Caribbean Development Dynamics Report 2026 presents three priority areas for policy action to drive sustainable growth:
“1. Deepening Regional Integration and International Partnerships: The report emphasizes that deeper regional cooperation can amplify investment, reduce costs, strengthen institutions, and bring the necessary scale to projects that would be difficult to deliver individually. Platforms such as the IDB Group’s ONE Caribbean program provide a practical framework for this cooperation, aligning priorities, strengthening project pipelines, and mobilizing public and private investment across countries.
“2. Embedding Resilience in Investment Planning: The report underscores the essential role of resilient infrastructure, early warning systems, and well-designed public-private partnerships in protecting livelihoods, safeguarding natural assets, and reducing long-term fiscal risks. Investments aligned with the Caribbean’s inherent strengths – such as the blue economy, energy, the creative economy, and tourism – can robustly support long-term development.
“3. Diversifying Financing Sources: The scale of required investment necessitates diversified financing sources, including domestic resource mobilization, private-sector participation, and international capital flows. The report underscores the importance of innovative financial instruments, such as green, social, sustainability, and blue bonds, as well as debt-for-nature swaps and resilient debt clauses.”