Central America and Caribbean Economic Outlook
CENAM’s GDP growth is set to pick up in 2026 from both 2025 and its prior decade average, buoyed by a stronger rise in public spending and falling interest rates aiding private spending and investment. Downside risks include prolonged energy and fertilizer price spikes amid the Iran war, plus the El Niño weather event potentially triggering extreme weather events.
Central America and Caribbean Inflation
In February, price pressures picked up on aggregate in CENAM, and likely accelerated further in March due to spillovers from the Iran war. In 2026, regional inflation should exceed 2025’s average on interest rate cuts and the sharpest depreciation of regional currencies vs the USD since 2021. Extreme weather events and higher-for-longer energy costs are upside risks.
This chart displays Economic Growth (Real GDP, ann. var. %) for Central America and Caribbean from 2010 to 2025.
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| Private Consumption (ann. var. %) | 11.2 | 4.6 | 3.6 | 4.3 | 3.6 |
| Fixed Investment (ann. var. %) | 21.4 | 6.1 | 7.2 | 3.6 | 4.6 |
| Inflation (CPI, ann. var. %, aop) | 6.0 | 8.6 | 7.0 | 4.7 | 2.8 |
| Merchandise Trade Balance (USD bn) | -39.2 | -61.2 | -66.6 | -62.8 | -62.7 |
| GDP per Capita (USD) | 6,056 | 6,702 | 7,181 | 7,603 | 7,981 |
| Merchandise Imports (USD bn) | 190.6 | 233 | 234.3 | 233 | 235 |
| External Debt (% of GDP) | 67.6 | 63.5 | 63.2 | 60.1 | 59.7 |
| Merchandise Exports (USD bn) | 151.4 | 171 | 167.6 | 170 | 172 |
| Fiscal Balance (% of GDP) | -4.2 | -2.6 | -3.0 | -3.3 | -2.9 |
| Public Debt (% of GDP) | 58.4 | 54.5 | 53.4 | 53.1 | 53.9 |
| Policy Interest Rate (%, eop) | 2.46 | 6.38 | 5.68 | 4.96 | 4.33 |
| Current Account Balance (% of GDP) | -1.1 | -1.8 | -0.7 | 0.0 | 1.1 |
| Economic Growth (Real GDP, ann. var. %) | 8.2 | 4.7 | 3.0 | 3.0 | 2.7 |
| Unemployment (% of active population, aop) | 8.5 | 7.0 | 5.7 | 5.8 | 6.0 |
| International Reserves (USD bn) | 80.4 | 79.3 | 86.9 | 91.0 | 110 |