The Central Bank of Barbados published an updated economic outlook that places 2026 growth at about 2 percent, the lower end of its previous 2 percent to 3 percent range. First-half growth of 1.4 percent was below the pace assumed, as tourism, construction and transportation underperformed amid higher freight, energy and financing costs, shipping disruptions, and weaker demand from the United States tourism market. Achieving the annual forecast requires output in the second half to grow by about 2.5 percent from the same period of 2025. Forward tourism bookings are 3.7 percent higher and planned airline capacity is up 3 percent, although the United States market remains weaker. Construction projects and improved agricultural conditions should also support activity, while elevated external costs, softer U.S. demand and delays to planned investment pose downside risks. The Bank expects near-term inflation of 2 percent to 3 percent, with government measures limiting some of the impact from higher food, energy and freight costs. Tourism receipts and other inflows should keep international reserves adequate, while fiscal discipline under BERT 2026 and the precautionary Stand-By Arrangement, alongside strong banking-sector capital and liquidity, should help preserve buffers against external shocks.
Central Bank of Barbados2026-07-31
Central Bank of Barbados revises 2026 growth forecast to about 2 percent after weaker first half
The Central Bank of Barbados revised its 2026 growth forecast to about 2 percent after first-half growth of 1.4 percent fell short of expectations. A second-half pickup in tourism and investment is expected, but weaker U.S. demand, elevated external costs and project delays remain risks. Near-term inflation is forecast at 2 percent to 3 percent, while reserves and banking-sector buffers are expected to remain strong.