Quarterly Economic Review June 2026
Published: Friday September 4th, 2026
The Central Bank of The Bahamas is pleased to announce the release of its Quarterly Economic Review for the Second Quarter of 2026. The Review provides an examination of the domestic economic performance, as well as sectoral developments, principally during the period April to June.
The domestic economy sustained its positive growth trajectory during the second quarter of 2026, as economic indicators continued to align with their medium to long-term trends. Tourism sector output maintained healthy gains, undergirded by a rebound in the high value-added stopover segment of the market, and ongoing growth in the cruise sector. Further, several small to medium-scale foreign investment-related projects provided stimulus to the construction sector. In terms of labour market conditions, in the latest data for the fourth quarter of 2025, the jobless rate decreased relative to both the previous quarter and the final quarter of 2024. In price developments, inflationary pressures increased, reflective of the pass-through effects of higher global oil prices on imported fuel and other goods and services.
The Government’s Budget for FY2026/2027 was presented to Parliament on May 27, 2026, under the theme “A Budget that Builds on Progress”, and approved at end-June. The Budget focused on consolidating economic recovery and fiscal stability. Given the series of announced measures and the ongoing strengthening in the domestic economy, total revenue is estimated to increase for FY2026/27, from the FY2025/26 target. In addition, total expenditure for FY2026/27 is forecasted grow, relative to the previous year’s budget. Against this backdrop, the Government projects a fiscal surplus in FY2026/27, higher than the anticipated surplus for FY2025/26. Further, the ratio of the Direct Charge to GDP is slated to decrease for FY2026/27, from the prior year’s target.
Monetary developments featured a buildup in bank liquidity during the second quarter, underpinned by an expansion in the deposit base, which outstripped the rise in domestic credit. Further, the banking system’s net foreign assets grew, owing largely to an increase in foreign currency inflows from real sector activity. In addition, banks’ credit quality indicators revealed mixed trends over the review quarter, as the rise in short-term arrears, overshadowed the falloff in non-performing loans, but improved on an annual basis, reflecting the sustained strengthening in economic activity and ongoing loan write-offs. Meanwhile, the latest available data for the first quarter of 2026, indicated a reduction in domestic banks’ overall profitability levels, due to higher operating costs and a falloff in earnings from “non-core” activities.
On the external side, the estimated current account deficit narrowed considerably during the second quarter, benefitting from a sharp contraction in the primary income account deficit, combined with higher secondary income account inflows and a rise in the services account surplus. Further, net financial account inflows—excluding reserve assets—increased owing largely to an expansion in net receipts for ‘other’ investment activities, notably an expansion in currency and deposits. Meanwhile, the estimated capital account transfers reported nil transactions during the second quarter, similar to the preceding year.
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