The United Nations Economic Commission for Latin America and the Caribbean (ECLAC) has warned that the region must urgently boost resource mobilization for development or risk another “lost decade.”

Global growth is expected to slow from 3.3 percent in 2024 to around 3 percent in 2025,  the lowest rate since the COVID-19 pandemic. ECLAC projects modest regional growth of 2.2 percent in 2025 and 2.3 percent in 2026.

For the Caribbean, excluding Guyana, growth is forecast at 1.8 percent in 2025 and 1.7 percent in 2026, affected by shifts in tourism, high logistics costs, and climate vulnerabilities. Antigua and Barbuda’s economy is projected to slow from 4.3 percent in 2024 to 3 percent by 2026.

The report highlights mounting pressure on public spending, with tax revenues remaining low and regressive at 21.3 percent of GDP in 2023, well below the OECD average of 34 percent. Tax evasion continues to drain resources, estimated at US$433 billion annually.

Public investment has also fallen as governments attempt to curb fiscal deficits, weakening their ability to stimulate growth. ECLAC notes that the financing gap for achieving the Sustainable Development Goals has widened from US$2.5 trillion annually before the pandemic to between US$3 trillion and US$4 trillion in 2025, potentially exceeding US$6 trillion by 2030.

The commission warns the region faces persistent “development traps,” including low growth capacity, high inequality, weak social mobility, and limited institutional effectiveness.

To address these challenges, ECLAC recommends a fiscal strategy built on five pillars: progressive tax reform, reduced tax evasion, sustained public investment, improved spending efficiency, and stronger fiscal institutions.

The commission also called for reforms to the international financial system, including stronger tax cooperation, better public debt management, and enhanced financial safety nets, to create a more equitable and stable global financial architecture.