Bahamian Economy Grows Close To 3% In 2025, Outlook Remains Positive For 2026

• The Bahamian economy grew close to 3% in 2025 and is expected to remain above its medium-term potential in 2026, according to Central Bank Governor John Rolle. This follows an estimated 3.4% rise in 2024, remaining above the medium-term potential of just under 2.0% per annum.
• Growth in tourism earnings supported the outcome, with pricing improvements bolstering otherwise capacity-constrained performance in the stopover market, alongside a sustained and robust expansion in cruise output,” Governor Rolle highlighted. He added that foreign investment continued to provide stimulus and, combined with tourism, helped boost employment. Expanded domestic lending also supported consumer spending and local investment, while loan default risks further reduced.
• Rolle noted that stopover tourism was constrained by limited hotel sector capacity and softer U.S. travel demand, but earnings were supported by higher pricing, continued vacation rental growth, and arrivals from non-U.S. visitors, particularly from Canada. The cruise market also maintained strong growth, bolstered by steady investments in private destination facilities. Official data from the Ministry of Tourism revealed that total visitor arrivals rose by 11.4% to 12.5Mn visitors in 2025, relative to 2024. Sea arrivals expanded by 13.8% to 10.8Mn, compared to the prior year. However, air arrivals fell by 1.6% to 1.7Mn, compared to 2024.
• As it relates to inflation, Rolle noted that the most recent data available through mid-2025 showed average prices fell marginally, signalling a negative inflation rate, compared with a positive rate in the same period in 2024. According to the Central Bank, in the 12 months to July 2025, the inflation was incrementally negative, compared to a positive rate of 1.5% in the same period last year. The 2025 period reflected reductions in the average costs for transportation, housing, water, gas, electricity & other fuels; recreation & culture; and restaurants & hotels.
• Looking ahead, Rolle noted that the economy’s growth rate in 2026 is expected to remain above its medium-term potential. “With the U.S. contribution to stopover projected to strengthen, stopover earnings growth could stabilise or improve incrementally, and along with vibrancy in cruise activity, help to at least maintain the same rate of gains as was experienced in 2025. Steadied-to-accelerated credit growth is expected to maintain elevated domestic demand, spending on imports, and limit any potential for a boost to either external reserves or bank liquidity. The Central Bank is fully accommodative of this outcome, given the existing healthy levels of external reserves,” he said.
• Rolle also cautioned that, while near- and medium-term risks to financial stability and the currency remain contained, external risks persist, including uncertainties in global trade policy and geopolitical tensions in the Middle East and Eastern Europe.

 (Source: Eyewitness News)