The Central Bank of The Bahamas published its Quarterly Economic Review for the second quarter of 2026, reporting continued domestic economic growth alongside stronger inflationary pressures. Tourism benefited from a rebound in higher-value stopover visitors and further cruise-sector growth, while foreign investment projects supported construction. Higher global oil prices fed through to imported fuel and other goods and services. The latest labor data showed that unemployment fell in the fourth quarter of 2025 from both the previous quarter and a year earlier. Bank liquidity increased as deposit growth exceeded the expansion in domestic credit, while net foreign assets rose on stronger foreign currency inflows from real-sector activity. Credit quality trends were mixed during the quarter, with higher short-term arrears offsetting a decline in nonperforming loans, although indicators improved on an annual basis. Banks’ overall profitability fell in the first quarter of 2026 because of higher operating costs and lower earnings from noncore activities. The estimated current account deficit narrowed considerably, supported by a smaller primary income deficit, higher secondary income inflows and a larger services surplus. The government’s approved fiscal year 2026-27 budget projects higher revenue and expenditure than the previous year’s targets, as well as a larger fiscal surplus than anticipated for fiscal year 2025-26. The ratio of the Direct Charge to gross domestic product is also projected to decline from the prior year’s target.

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