Quarterly Economic Review - September 2025
Published: Friday December 5th, 2025
The Central Bank of The Bahamas is pleased to announce the release of its Quarterly Economic Review for the Third Quarter of 2025. The Review provides an examination of the domestic economic performance, as well as sectoral developments, principally during the period July to September.
Preliminary indications are that during the third quarter of 2025, the domestic economy’s positive—albeit moderated—growth momentum was maintained, with economic indicators converging closer to their expected medium-term potential. Tourism recorded healthy, but tempered activity, given capacity constraints in the high value-added air segment, although the cruise sector continued to register robust performance. Further, new and ongoing foreign investment projects undergirded activity in the construction sector. Labour market conditions also showed improvements over the second of 2025, underpinned by the ongoing strengthening in domestic economic activity. In price developments, inflationary pressures decreased, reflective of a decline in cost pressures from imported fuel and goods and services.
Provisional estimates for the fourth quarter of FY2024/25 indicated that the Government’s budgetary surplus more than doubled, vis-à-vis the comparable quarter of FY2023/24. Contributing to this outturn was an expansion in total revenue, which overshadowed the rise in aggregate expenditure. Financing for debt rollovers and financial assets acquisition during the fourth quarter of FY2024/25 was sourced mainly from the domestic market and consisted of a mix of long and short-term debt instruments. Meanwhile, external borrowings were mainly utilized for liability management.
In monetary developments, bank liquidity expanded during the review quarter, as the rise in the deposit base contrasted with the decline in domestic credit. Further, the reduction in the financial system’s net foreign assets moderated, reflecting the Government’s external borrowings and net foreign currency inflows from real sector activity. Meanwhile, against the backdrop of the sustained gain in economic activity, banks’ credit quality indicators improved during the review period. In addition, banks recorded increased profits for the second quarter of 2025—the latest period for which data is available—supported by an increase in non-interest income and a decline in provisions for bad debt.
On the external side, the estimated current account deficit widened during the review quarter, reflective of a falloff in travel receipts, which narrowed the services account surplus, and an expanded deficit on the primary income account. Further, the financial account inflows, excluding reserve assets, declined, largely attributed to a surge in outflows related to “other” investments activities, as currency and deposit transactions shifted to a net outflow from a net inflow in the preceding year, owing primarily to a surge in the banking sector’s net deposit liabilities.
For full text reading, please download the attached document.
