Caribbean Economy to Grow 2.1%

## Behind the Headline: Navigating the Currents of Caribbean Growth Beneath the Inter-American Development Bank's 2.1% growth forecast for Latin America and the Caribbean in 2026 lies a complex regional picture. For the Caribbean specifically, other institutions offer varied outlooks, with the UN's ECLAC projecting a more modest 1.7% expansion for the tourism-dependent nations, excluding the outlier Guyana. This highlights a dual reality: while some nations are set for steady growth, others face a more challenging economic environment. The powerhouse of Guyana, with its booming oil sector, is projected to see its GDP surge by an astonishing 26.6% in 2026, significantly elevating the regional average. For the tourism-centric economies where Sandals Resorts operates, the forecasts are more subdued but still positive. Jamaica is anticipating 3.0% growth, supported by its logistics hub strategy, while Barbados is projected at 3.5% and The Bahamas at 2.4%, both buoyed by a strong rebound in tourism and ongoing resort developments. For supply chain operations, this growth occurs within a challenging logistics environment. Intra-regional shipping costs in the Caribbean are notably high, with maritime transport costs estimated to be nearly double the global average. These expenses are compounded by port inefficiencies and a merchandise trade deficit of approximately US$38 billion, underscoring the region's heavy reliance on imported goods, including an estimated US$8.5 billion in food products annually. In response to these logistical hurdles, significant infrastructure investments are underway. Noteworthy projects include a $250 million investment by Global Ports Holding into terminal developments in Antigua, the Bahamas, and St. Lucia, with the Antigua project set to open in 2026. These upgrades aim to enhance capacity and efficiency, potentially mitigating some of the longstanding high costs and delays associated with inter-island freight. The operational strategy for large-scale resort chains in this fragmented environment often involves a consolidated logistics model. A case study of a new luxury resort in Anguilla highlighted the value of managing inbound transportation from a single consolidation point in Miami. This approach allowed for significant freight cost savings by negotiating volume reductions and optimizing shipping schedules, a strategy that offers a potential blueprint for managing multi-island inventory. To counter the high costs and logistical complexities, major hospitality brands are increasingly turning to technology. Integrated hotel management systems that offer multi-property stock visibility are becoming crucial. These platforms allow for centralized tracking of inventory, automated procurement processes, and better coordination between properties, which is essential for managing the flow of goods across a network of island-based resorts. Furthermore, there is a growing emphasis on building supply chain resilience through local and regional sourcing. The pandemic exposed the vulnerabilities of long-distance supply chains, prompting a strategic shift. For the hospitality sector, this involves developing stronger partnerships with local and regional suppliers to reduce dependency on distant markets and mitigate the risks of shipping disruptions. This strategy not only strengthens the supply chain but also supports local economies. Looking ahead, the global shipping industry is bracing for a period of overcapacity, with a projected 5% increase in global fleet capacity in 2026. This influx of new container ships is expected to put downward pressure on freight rates, which could offer some relief to the high shipping costs that have long plagued the Caribbean. However, the benefits of this trend will be contingent on improvements in local port infrastructure and efficiency.