Economics & Development

Barbados’ tourism-dependent, import-heavy economy remains exposed to external and climate shocks. Growth cooled in 2025 as domestic demand normalized, but with stable prices, resilient tourism, job creation, and modest fiscal gains, while poverty continued to fall. Public debt, though easing, still limits fiscal flexibility, prompting the continuation of priority reforms to foster green energy, diversification, and stronger safety nets.

Substantial progress in restoring macroeconomic stability through fiscal consolidation and exchange rate reforms. Growth rebounded to 4.4 percent in 2025 and is projected at 3.6 percent in 2026. Inflation is declining. Poverty has eased, though high informality and inequality constrain inclusive growth. Balancing exchange rate flexibility, reserves accumulation, and disinflation poses risks, amid shallow buffers and heightened international volatility.

Estimated growth was 3.8 percent in 2025, driven by private consumption, supported by easing inflation (3.3 percent) and strong remittances. Poverty was estimated at 17.1 per cent in 2025 (US$4.20/day, 2021 PPP) and is projected to continue declining. Growth is expected to average 4.1 per cent over 2026–2028, amid increased tourism from hosting an international sporting event. Revenue mobilization and private sector competitiveness remain priorities.

Growth accelerated to 8.1 percent in FY24/25, driven by new hydropower projects and tourism recovery, but youth unemployment remained high at 20.6 percent. The fiscal deficit widened to 2.6 percent of GDP, and the current account deficit (CAD) remained elevated. Growth is projected at 7.1 percent in FY25/26, with poverty declining, with risks stemming from higher fuel prices and fiscal pressures linked to the Middle East conflict.

Sierra Leone’s economy expanded modestly in 2025, under-pinned by tighter monetary and fiscal policies. Sustained progress will depend on continued fiscal consolidation, prudent debt management, and institutional reforms to strengthen public financial management, governance and improve the investment climate. While extreme poverty remains widespread, it is expected to decrease as inflation eases, reducing cost-of-living pressures on households.

A major oil export disruption in FY25 triggered a contraction in real GDP and sharp currency depreciation. High inflation, reduced development aid, and arrears to civil servants eroded household consumption and raised extreme poverty. With oil exports restored, early FY26 shows tentative stabilization. The outlook remains fragile amid entrenched corruption, weak governance, and escalating domestic conflict, and the conflict in the Middle East.

In 2025, estimated GDP growth is 7.0 percent (3.7 percent per capita), supported by oil exports and agriculture. Deflation (4.7 percent) and strong agricultural output reduced extreme poverty by 3.8 percentage points. Debt risks remain high amid tight financing conditions, rollovers, and persistent arrears. In 2026, growth is projected at 6.7 percent, with oil output reaching 35 million barrels. Middle East spillovers are modest, but substantial risks remain.

GDP growth is estimated to slow to 1.7 percent in 2025, with a modest recovery to 2.7 percent in 2026, influenced by the ongoing Middle East conflict. New energy projects could boost medium-term growth. With lower Southern African Customs Union (SACU) revenues, maintaining fiscal discipline is crucial to reduce debt. Due to modest growth and high unemployment, poverty is estimated at 28.3 percent in 2025 (US$3/day international poverty line, 2021 PPP).

The conflict in the Middle East presents a mixed outlook for Oman’s growth. Higher oil prices and improved fertilizer export revenues could support fiscal and external balances, at least in the short term, although logistical frictions and elevated regional uncertainty may negatively affect the tourism sector and broader economic sentiment.

Syria shows steady signs of economic recovery as sanction relief, national reconciliation, accelerating refugee returns, improved electricity supply, major public-private investment, and substantial reconstruction needs are expected to lift growth. Violence, high living costs, limited aid, banking constraints, and security risks weigh on the outlook. Years of conflict have disrupted statistical systems and data production, increasing uncertainty around economic estimates.

Economic growth remained robust in 2025, driven by trade, transport, and construction activities. Inflation remained within its target range, but pressures are amounting following recent tax measures. Significant risks persist, including the potential decline in external financing and climate related shocks. Poverty reduction is expected to be considerable in the short term if recent trends are sustained.

In 2025, estimated GDP growth is 7.0 percent (3.7 percent per capita), supported by oil exports and agriculture. Deflation (4.7 percent) and strong agricultural output reduced extreme poverty by 3.8 percentage points. Debt risks remain high amid tight financing conditions, rollovers, and persistent arrears. In 2026, growth is projected at 6.7 percent, with oil output reaching 35 million barrels. Middle East spillovers are modest, but substantial risks remain.

Growth is projected at 6.1 percent in 2026, supported by infrastructure, extractives, an improving business environment, and macroeconomic stability with low inflation and exchange rate flexibility. External balances are manageable, amid positive terms of trade. Fiscal deficits will narrow as revenue strengthens. Yet, poverty is expected to decline marginally given human development gaps and scarce jobs. Risks include political tensions, fiscal pressures, Middle East conflict, and climate shocks.

Growth is expected to soften to 4.3 percent in FY26 from 4.4 percent in FY25. Inflation remains in double digits, thus constraining household purchasing power. The conflict in the Middle East will weaken the external position and pose risks to the growth and poverty-reduction outlooks. Job-rich growth and improved socioeconomic outcomes require strengthening fiscal institutions and advancing the “business ready” agenda and human capital development.