News

Domestic Economic Developments

Overview

The domestic economy continued to expanded at a healthy pace in August, remaining above its expected medium-term potential. Alongside sustained foreign investment indicators, tourism expansion strengthened, given extended gains in the high value-added stopover segment and buoyant cruise sector activities. In price developments, average consumer price inflation firmed during the twelve months to June, compared to the same 2025 period, underpinned by increased cost pressures from imported fuel and other goods and services. Meanwhile, monetary developments in the review month revealed a reduction in banking sector liquidity, as the contraction in the Bahamian dollar deposit base outstripped the decline in domestic credit. Similarly, in line with seasonal patterns, external reserves decreased in August, attributed to net foreign currency outflows through both the private and public sectors.

Real Sector

Tourism

Preliminary data for the month of August indicated that tourism sector earnings growth strengthened, as activity in the stopover segment continued to improve and the cruise sector maintained its healthy pace of expansion, paced by sustained demand from key source markets.

Official data from the Ministry of Tourism indicated that total arrivals rose by 16.8% to 1.2 million visitors in July, vis-à-vis the same period in 2025. Supporting this outcome, sea passengers advanced by 18.2% to 1.0 million, while air arrivals grew by 10.0% to 0.2 million.

A breakdown by major port of entry revealed that total arrivals to Grand Bahama more than doubled 177,167, relative to the same month in the prior year. Contributing to this outturn, sea arrivals increased to 171,336 from 64,916 last year, contrasting with a 10.0% decline in air arrivals to 5,831 visitors. Further, visitors to the Family Islands rose by 17.6% to 534,610 compared to the corresponding period of 2025, on account of a 17.9% rise in sea passengers to 495,185 and a 14.3% gain in air traffic to 39,425. In contrast, total visitors to New Providence declined by 2.8% to 482,291 relative to the same period last year, as the sea component fell by 7.3% to 339,494. However, air arrivals rose by 9.8% to 142,797 visitors.

On a year-to-date basis, total arrivals grew by 14.8% to 8.5 million visitors. Underlying this development, sea visitors expanded by 16.4% to 7.2 million, while air traffic increased by 5.8% to 1.2 million.

The most recent data provided by the Nassau Airport Development Company Limited (NAD) showed that total departures—net of domestic traffic—rose by 7.7% to 161,919 in August, vis-à-vis the comparative 2025 period. Specifically, US departures grew by 4.9% to 137,266. In addition, non-US international departures increased by 26.7% to 24,653.

In the eight months to August, total outbound traffic expanded by 5.7% to 1.3 million. In particular, non-US international departures advanced by 32.8% to 0.2 million, while US departures grew by 1.3% to 1.0 million.

Concerning the short-term vacation rental market,  data from AirDNA revealed that total room nights sold grew by 14.8% to 42,979 in August, relative to the corresponding 2025 period. The occupancy rate for hotel comparable listings firmed to 47.6% from 43.2% a year earlier, and for entire place listings, to 36.7% from 34.5%. Further, the average daily room rate (ADR) for entire place listings increased by 5.8% to $633.78, compared to the previous year. Similarly, the rate for hotel comparable listings moved higher by 5.1% to $157.97.

Prices

Average consumer price inflation—as measured by the All-Bahamas Retail Price Index—rose to 2.7% in the 12 months to June 2026, following a 0.2% decline in the same period of 2025. Underlying this outturn, average costs increased for restaurants & hotels, by 17.3%; for housing, water, gas, electricity & other fuels, by 3.1%; for transportation, by 2.0%; and for communication, by 0.4%, after posting reductions in the year prior. Further, average inflation quickened for furnishing, household equipment & household maintenance (7.7%), health care (3.6%), and miscellaneous goods & services (3.1%). In a partial offset, inflation slowed for alcoholic beverages, tobacco & narcotics (5.4%); education (2.4%); clothing & footwear (2.2%); food & non-alcoholic beverages, (1.3%); and recreation & culture (0.8%).

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