NASSAU, Bahamas, Jun 30, CMC – The Central Bank of the Bahamas (CBB) says the domestic economy continued to expand at a healthy pace in May, with economic indicators normalising closer to their expected medium-term potential.
In its Monthly Economic and Financial Developments (MEFD) publication, the CBB said expectations are that the domestic economy will grow at a steady pace in 2026, vis-à-vis 2025, as the economy continues to approach its medium-term growth potential, with performance closely tied to outcomes in the tourism sector.
It said the tourism industry is anticipated to remain robust, undergirded by strengthening in the high-value added stopover segment and healthy gains in the cruise sector.
Further, new and ongoing foreign investment projects are projected to continue to support activity in the construction sector, and by extension, economic output. Further, labour market conditions are expected to improve during the year, with gains occurring in the tourism and construction sectors.
Concerning fiscal developments, the CBB said the government’s financing gap is projected to decrease, supported by sustained revenue growth tied to tourism-related taxable economic activity, along with estimated inflows from the domestic minimum corporate tax.
In addition, financing needs are expected to be met through a mix of domestic and external borrowings, with the greater share sourced domestically.
In monetary sector developments, banking system liquidity is predicted to stay elevated, although advancements in commercial bank lending to the private sector could induce a modest decline.
External reserves are expected to fluctuate around 2025 levels; remaining significantly above international standards and more than adequate to support the Bahamian dollar’s fixed exchange rate.
However, downside risks to the outlook remain elevated, as stopover demand from the U.S. remains vulnerable to global tariff policy uncertainty, ongoing tensions in Eastern Europe and the conflict in Middle East.
In addition, elevated energy prices are expected to weaken short-term travel demand, raise financing costs related to foreign investment, and delay the achievement of interest cost reductions for the public.
The CBB said that tourism earnings indicators firmed in comparison to 2025 supported by strengthened indicators for the higher value-added stopover component and sustained gains in cruise arrivals.
In monetary developments, during the review month, the narrow measure of banking sector liquidity contracted, as the expansion in domestic credit outpaced the rise in the deposit base. However, external reserves increased in May, reflective of net foreign currency inflows through the public and private sectors.
According to the CBB, monthly data indicated that tourism output indicators remained moderately firmed in comparison to 2025, paced by improved outcomes for the high-value stopover segment, alongside further gains in the cruise category. However, accommodation capacity remained constrained.
Official data from the Ministry of Tourism showed that total arrivals increased by 3.3 per cent to 1.1 million visitors in April, when compared to the same period of the previous year. Supporting this outturn, sea passengers grew by 3.6 per cent to 0.9 million, while air arrivals rose by 1.8 percent to 0.2 million.
On a year-to-date basis, total arrivals expanded by 13.9 percent to five million visitors.
According to the latest data provided by Nassau Airport Development Company Limited (NAD), total departures, net of domestic traffic, increased by 7.1 per cent in May, vis-à-vis the comparative 2025 period. Supporting this outcome, international departures rose by 18.4 per cent to 22,985..
In the five-months to May, total outbound traffic expanded by 5.2 per cent to 0.8 million. The CBB said that short-term vacation rental market metrics indicated that total room nights sold increased by 6.6 per cent to 48,730 in May, vis-à-vis the corresponding period in 2025. Specifically, the average daily room rate (ADR) for entire place listings grew by 9.5 per cent to US$752.89. In contrast, the rate for hotel comparable listings declined by 1.1 per cent to US$167.72.
On a year-to-date basis, total room nights sold grew by 9.9 per cent to 306,687, when compared to last year.
The monetary sector developments for the month of May featured a contraction in the narrow measure of banking sector liquidity, as expansion in domestic credit outpaced the buildup in the deposit base.
In particular, excess reserves—a narrow measure of liquidity—decreased by US$23.7 million to US$2,026.5 million, a reversal from the US$44.1 million increase in the prior year. Further, the growth in excess liquid assets—a broad measure of liquidity—slowed to US$15.9 million from US$33.8 million in the preceding year, for an ending balance of US$3,455.8 million.
During May, external reserves grew by US$31.7 million, a reversal from the US$26.9 million decline in the previous year, bringing the total stock to US$3,252.4 million.
CMC/ag/ir/2026