Caribbean governments allocated an average of 12.9% of tax revenues to debt service payments in 2022, with significant variation across the region. This compares to 11.5% in Latin America and 4.8% in OECD countries.
Debt service ratios range substantially, from single digits to nearly one-quarter of tax revenues.
The Bahamas directs 23% of tax revenues to debt payments, followed by Suriname (22%), the Dominican Republic (20%), and Jamaica (19%). At the lower end, Guyana allocates 5% and Saint Kitts and Nevis 7% of tax revenues to servicing debt.
Several Caribbean nations successfully reduced their debt service obligations between 2012 and 2022, including Jamaica, Saint Kitts and Nevis, Grenada, and Barbados, following debt restructuring and fiscal consolidation programmes.
However, rising international interest rates since 2022 have increased borrowing costs for several economies in the region.
Higher debt service ratios mean fewer resources available for other budget priorities, including climate adaptation infrastructure, social protection programmes, and public services – a particularly acute challenge for small island developing states facing climate vulnerability.
Source: OECD/IDB Caribbean Development Dynamics 2025
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