Central America and Caribbean Economic Outlook
The Iran energy shock means our panelists now expect CENAM’s GDP growth this year to broadly equal 2025’s pace instead of accelerating. Nevertheless, GDP growth should stay above the past-decade average, underpinned by healthy consumption and investment and a pickup in goods exports. A stronger-than-expected El Niño poses the main downside risk.
Central America and Caribbean Inflation
In April, regional inflation hit a 16-month high amid price spikes for energy and food due to the Iran war. Our panelists raised their 2026 inflation forecasts again in the past month; they now see regional inflation rising even more sharply this year from last. Lower interest rates and weaker regional currencies will further fan price pressures in the region.
This chart displays Economic Growth (Real GDP, ann. var. %) for Central America and Caribbean from 2010 to 2025.
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| GDP per Capita (USD) | 6,056 | 6,702 | 7,181 | 7,603 | 7,975 |
| External Debt (% of GDP) | 67.6 | 63.5 | 63.2 | 60.1 | 59.7 |
| Current Account Balance (% of GDP) | -1.1 | -1.8 | -0.7 | 0.0 | 1.0 |
| 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 | -63.1 |
| 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 |
| Merchandise Imports (USD bn) | 190.6 | 233 | 234.3 | 233 | 235 |
| 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 |
| Economic Growth (Real GDP, ann. var. %) | 8.2 | 4.7 | 2.9 | 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 |