The International Monetary Fund has warned that rising global uncertainty and tensions linked to the conflict involving the United States and Iran could negatively impact Antigua and Barbuda’s economy despite continued growth and easing inflation.

In its latest Article IV consultation, the IMF said downside risks remain elevated due to commodity price volatility and possible economic slowdowns among major trading partners.

Executive Directors specifically referenced the war in the Middle East as a concern, noting that heightened geopolitical tensions could place additional strain on small, import-dependent economies such as Antigua and Barbuda.

Recent clashes and instability around the Strait of Hormuz — a critical global oil shipping route — have contributed to fears of rising fuel and commodity prices internationally. (Reuters)

The IMF said Antigua and Barbuda remains vulnerable to external shocks because of its dependence on tourism, imports and foreign investment flows. A slowdown in major economies or sustained increases in oil and shipping costs could affect local growth and living costs.

Despite the risks, the IMF said Antigua and Barbuda’s economy continued to expand in 2025, with real GDP growth estimated at 3 percent, supported largely by construction activity.

Inflation also moderated sharply, falling from over 6 percent in 2024 to 1.4 percent in 2025, according to the report.

The IMF said stronger tourism demand, improved connectivity and productivity-enhancing reforms could still strengthen the country’s outlook if global conditions stabilize.