The Central Bank of the Bahamas’ latest domestic economic developments update indicates that the economy continued to expand at a healthy pace in May, with activity moving closer to its medium-term potential. Tourism earnings indicators strengthened compared with 2025, supported by stronger performance in the higher value-added stopover segment and continued gains in cruise arrivals. In monetary conditions, the narrow measure of banking sector liquidity contracted as domestic credit growth outpaced the rise in deposits, while external reserves increased on net foreign currency inflows through the public and private sectors. Tourism remained the main support for activity, although accommodation capacity stayed constrained. Official data showed total arrivals rose 3.3% year over year to 1.1 million in April, with sea arrivals up 3.6% to 0.9 million and air arrivals up 1.8% to 0.2 million. Year to date, total arrivals increased 13.9% to 5.0 million, driven by a 15.7% rise in sea passengers and a 4.3% recovery in air traffic. Short-term vacation rental indicators also improved in May, with room nights sold up 6.6% to 48,730 and occupancy rates higher for both hotel comparable and entire place listings. The update also summarized the government’s approved FY2026/27 budget, which forecasts revenue of 4.4 billion and expenditure of 4.1 billion, compared with projected FY2025/26 totals of 3.9 billion and 3.8 billion, respectively. The budget projects a fiscal surplus of 223.1 million, or 1.2% of GDP, and emphasizes stronger compliance, tax administration modernization and targeted tax measures rather than broad tax increases. Measures include a two-tier real property tax system, a 0.25% increase in the business license rate for businesses earning over 175.0 million annually, relief for first-time homeowners and selected household items, and spending increases for healthcare, infrastructure, national security, digital systems and integration of the SandDollar into government payments.
Central Bank of the Bahamas2026-06-29
Central Bank of the Bahamas reports healthy May expansion with firmer tourism and higher external reserves
The Central Bank of the Bahamas said the economy continued to expand at a healthy pace in May, supported by firmer tourism indicators, while banking liquidity contracted and external reserves increased. The update highlighted a 3.3% rise in April arrivals and an approved FY2026/27 budget that projects a 223.1 million fiscal surplus on revenue of 4.4 billion and expenditure of 4.1 billion.