News

Domestic Economic Developments

Overview

Economic indicators suggest that during the month of September, the domestic economy maintained its healthy growth momentum, relative to the comparative 2025 period.  While key performance indicators continued to approach their estimated medium- to long-term levels, estimated growth trended above its forecasted medium-term average potential. Tourism output continued to register healthy gains, underpinned by the steady strengthening in the high-value-added stopover segment and robust growth in cruise sector activities. In fiscal developments, provisional data on the Government’s budgetary operations for FY2025/26 revealed that the fiscal balance shifted to an estimated surplus of $39.3 million, from a deficit of $84.8 million in FY2024/2025, as the growth in total revenue outpaced the rise in aggregate expenditure. On the labour front, the unemployment rate declined in the first quarter of 2026, compared with the first quarter of 2025. Monetary trends for September were marked by a reduction in banking sector liquidity, as the growth in domestic credit outweighed the build-up in the deposit base. Similarly, external reserves contracted during the review month, due to seasonal net foreign currency outflows through both the private and public sectors.

Real Sector

Tourism                                                                                                            

Preliminary data showed that tourism sector earnings continued to grow during the review month, bolstered by a more recovered stopover segment and  sustained growth in the cruise sector, buoyed by demand from key source markets.

Official data provided by the Ministry of Tourism indicated that total visitors grew by 13.0% to 1.2 million in August, relative to the same period in 2025. Accounting for this outturn, sea arrivals increased by 14.1% to 1.0 million, while air arrivals rebounded by 4.1% to 0.1 million, following a 6.3% reduction in 2025.

A breakdown by major port of entry showed that total arrivals to New Providence advanced by 21.6% to 446,625 relative to the comparable 2025 period. In particular, sea arrivals grew by 27.6% to 348,078 vis-à-vis the previous year, while air arrivals moved higher by 4.3% to 98,547. In addition, visitor arrivals to the Family Islands increased by 11.0% to 540,193, compared with the corresponding period last year, as sea passengers advanced by 11.1% to 522,411 and air traffic by 9.5% to 17,782. Meanwhile, Grand Bahama recorded a modest 0.6% improvement in total arrivals to 181,565, relative to a year earlier, as the 1.1% gain in the sea component to 176,857, offset the 14.8% decrease in the air segment to 4,708.

On a year-to-date basis, total arrivals rose by 14.5% to 9.6 million visitors. Underpinning this outturn, was an accelerated sea arrivals boost of 16.1% to 8.3 million, while air arrivals rebounded by 5.6% to 1.3 million. In particular, rebounded stopover traffic flows to New Providence and the Family Islands, more than offset a dowturn in arrivals to Grand Bahama. Meanwhile, the acceleration in cruise activity captures a more than doubling in arrivals to Grand Bahama, as opposed to more tempered growth in New Providence and the Family Islands.

Data provided by the Nassau Airport Development Company Limited (NAD) revealed that total departures—net of domestic traffic—grew by 11.1% to 82,784 in September, relative to the same period of 2025. Specifically, non-US international departures expanded by 14.2% to 16,303, while US departures rose by 10.4% to 66,481.

On a year-to-date basis, total outbound traffic increased by 6.0% to 1.3 million. In particular, non-US international departures advanced by 31.3% to 0.2 million, while US traffic rebounded by 1.8%.

In the short-term vacation rental market, data from AirDNA showed that total room nights sold increased by 30.7% to 25,753 in September, vis-à-vis the corresponding period in 2025. Reflecting this outturn, the occupancy rate for hotel comparable listings rose to 42.9% from 37.5% in the same period last year, while the rate for entire place listings firmed to 30.4% from 26.4%. In addition, the average daily room rate (ADR) for entire place listings moved higher by 24.2% to $580.78, relative to the year earlier, while the rate for hotel comparable listings grew by 7.0% to $142.19.

In the nine-months to September, total room nights sold grew by 11.0% to 496,795, compared to 2025. Underlying this outturn, hotel comparable and entire place listings advanced by 13.5% and 9.4%, respectively. Further, the ADR rose for entire place listings by 7.3% and for hotel comparable listings by 4.3%.

Fiscal

Provisional data on the Government’s budgetary operations for FY2025/26 indicated that the fiscal balance shifted to an estimated surplus of $39.3 million, from a deficit of $84.8 million in FY2024/2025. Contributing to this outturn, total revenue rose by $563.5 million (16.6%) to $3,964.0 million, outpacing the $439.4 million (12.6%) expansion in total expenditure to $3,924.7 million.

Revenue growth was led by a $392.8 million (13.0%) build-up in tax receipts to $3,419.7 million. Underlying this outcome, collections from taxes on goods and services rose by $297.6 million (15.3%) to $2,241.6 million, vis-à-vis the previous fiscal year, owing primarily to a $214.3 million (14.9%) rise in value added tax (VAT) receipts to $1,652.4 million and a $40.7 million (32.4%) gain in financial and realty stamp taxes to $166.5 million.

Further, revenue from the use or supply of goods and services rose by $43.5 million (13.5%) to $365.7 million, attributed to gains in licenses to conduct specific business activities (14.1%), marine license activities (114.1%), and motor vehicle taxes (3.7%). In addition, excise tax collection increased to $11.1 million, from $10.8 million a year earlier. Conversely, proceeds from gaming taxes declined by $1.3 million (2.8%) to $45.9 million, from the preceding year. Meanwhile, the newly introduced tax on income, profits, and capital gains (domestic minimum top-up tax) yielded $68.6 million, while general stamp tax collection increased to $4.7 million from $1.1 million in the previous fiscal year. Moreover, taxes on international trade and transactions moved higher by $37.3 million (4.3%) to $908.9 million, in comparison with the preceding fiscal year, amid a $40.7 million (11.9%) increase in departure taxes to $382.9 million, and a $3.7 million (1.4%) uptick in customs and other import duties to $262.7 million. Providing some offset, collections from property tax reduced by $14.2 million (6.8%) to $195.8 million, relative to the prior year.

Non-tax revenue expanded by $169.7 million (45.4%) to $543.3 million, led by a $130.8 million (224.6%) rise in property income to $189.1 million. In addition, proceeds from the sale of goods and services rose by $32.6 million (12.2%) to $298.8 million, compared to the previous fiscal year. Payments for fines, penalties, and forfeitures increased by $3.1 million (41.4%) to $10.7 million, while miscellaneous and unidentified revenue grew by $1.5 million (15.0%) to $11.6 million. Likewise, reimbursements and repayments firmed by $1.1 million (3.6%) to $31.2 million and proceeds from the sales of other non-financial assets, by $0.6 million (43.4%) to $1.8 million, vis-à-vis the corresponding period in the prior fiscal year.

In terms of expenditure, recurrent spending grew by $310.2 million (9.7%) to $3,509.8 million in FY2025/26. Contributing, payments for the use of goods and services expanded by $162.3 million (23.4%) to $855.8 million. Similarly, subsidies advanced by $60.4 million (15.0%) to $462.0 million, owing primarily to an increase in disbursements to public corporations. Further, outlays for employee compensation rose by $34.3 million (3.9%) to $913.1 million, while other “miscellaneous” payments, moved higher by $33.6 million (11.1%) to $336.7 million. In addition, allocations for social assistant benefits rose by $24.5 million (10.5%) to $258.2 million, and grant payments, by $0.3 million (3.5%) to $9.4 million. In a slight offset, interest payments reduced by $5.1 million (0.8%) to $674.7 million, attributed to a decline in the external component. Meanwhile, capital expenditure increased by $129.2 million (45.2%) to $414.9 million, underpinned by a $116.0 million (47.6%) growth in the acquisition of non-financial assets and a $13.2 million (31.2%) rise in capital transfers.

Employment

According to provisional quarterly estimates compiled by the Bahamas National Statistical Institute, labour market conditions improved in the first quarter of 2026, relative to the corresponding quarter in 2025. The unemployment rate declined to 8.1% compared to 10.8% in the same period of the prior year. Specifically, the number of employed persons increased to 228,785 in the first quarter of 2026, as compared to 214,725 in the first quarter of 2025. In addition, the youth unemployment rate decreased to 14.2%, from 20.9%, in the first quarter of 2025.

At the island level, the unemployment rate in New Providence reduced to 7.8% in the review quarter, from  11.0% in the first quarter of 2025. In Grand Bahama, the jobless rate fell to 8.2% from 12.8% in the same period last year. In Abaco, the unemployment rate declined to 8.7% from 13.8% recorded in the first quarter of 2025.

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