Eastern Caribbean Currency Union

The currency union continues to anchor macroeconomic stability in a shockprone region. Tourism has sustained post-pandemic growth while inflation has moderated in tandem with global trends. Member states’ fiscal positions have not improved commensurately, however: the decline in union-wide public debt has stalled, putting achievement of the 2035 regional debt target at risk. The financial system remains broadly stable, but legacy balance-sheet weaknesses and vulnerabilities in the non-bank sector—where supervision remains fragmented—continue to pose challenges. Looking ahead, economic momentum is expected to slow amid higher fuel and other import costs, as well as persistent productivity and investment constraints and adverse demographic trends. Downside risks dominate in an environment of elevated global economic uncertainty, including from the ongoing war in the Middle East.