Quarterly Economic Review December 2025
Published: Thursday March 5th, 2026
The Central Bank of The Bahamas is pleased to announce the release of its Quarterly Economic Review for the fourth quarter of 2025. The Review provides an examination of the performance of the domestic economy, as well as sectoral developments, principally during the period October to December.
The Bahamian economy sustained its moderate growth trajectory during the fourth quarter of 2025, as economic indicators trended closer to their projected medium-term potential. Tourism output expanded, undergirded by robust gains in sea traffic. However, the high value-added air segment continued to experience capacity constraints. In addition, several diverse foreign direct investment-related projects supported activity in the construction sector. In price developments, indications are that domestic energy price pressures remained subdued during the review quarter, reflective of the falloff in global oil prices.
Preliminary estimates showed that the Government’s overall deficit narrowed during the first quarter of FY2025/2026, compared to the same quarter of FY2024/25. Underlying this development was a value added tax (VAT) led growth in total revenue, which outstripped the rise in aggregate expenditure. Budgetary financing during the first quarter of FY2025/26 was dominated by the domestic market, and comprised of a blend of long and short-term debt instruments.
On the monetary front, during the fourth quarter, bank liquidity reduced, despite the buildup in the deposit base outpacing the growth in domestic credit. Nevertheless, the decrease in the banking system’s net foreign assets moderated vis-à-vis the comparative quarter last year, bolstered by the Government’s external borrowings and net foreign currency inflows from real sector activity. Meanwhile, banks’ credit quality indicators recorded mixed trends over the fourth quarter, as the rise in short-term arrears outstripped the decline in non-performing loans, but improved on an annual basis, benefitting from sustained economic growth and ongoing loan write-offs. Profitability indicators for the third quarter—the latest period for which data is available—also showed gains in interest and non-interest income and a decline in provisions for bad debt.
In external sector developments, the estimated current account deficit widened during the fourth quarter, owing primarily to a reduction in the services account surplus, led by a falloff in travel receipts, and a reversal in the secondary income account position to a net payment from a net receipt. In contrast, net financial account inflows, excluding reserve assets, increased notably, as portfolio investment transactions shifted to a net receipt from a net payment the previous year and net debt securities inflows expanded.
For full text reading, please download the attached document.
