The Tribune

By NEIL HARTNELL

TRIBUNE Business Editor

nhartnell@tribunemedia.net

THE CENTRAL Bank yesterday forecast that The Bahamas’ 2026 economic growth will “moderately exceed its medium-term potential” of between 1.5-1.9 percent after tourism arrivals for the seven months to end-July 2026 increased by 14.8 percent to 8.5m.

The banking regulator, unveiling its report on August economic developments, said that - while sea arrivals again drove the bulk of the visitor increase - their air counterparts played their part, too, with a 5.8 percent year-over-year jump to 1.2m. Air arrivals to New Providence and the Family Islands jumped by 6.4 percent and 4.9 percent, respectively, for the seven months to end-July 2026, with Grand Bahama slightly off by 0.5 percent compared to 2025.

On the cruise and sea arrivals front, the Central Bank data showed New Providence was slightly down on last year’s figures by 0.3 percent through the seven months to end-July 2026, although the jump in air visitors ensured they were up by 1.3 percent overall. Grand Bahama, thanks to the opening of Carnival’s $600m Celebration Key destination, saw sea arrivals quadruple or rise by 301.8 percent, while numbers to the Family Islands were ahead by 8.6 percent.

“On a year-to-date basis, total arrivals grew by 14.8 percent to 8.5m visitors. Underlying this development, sea visitors expanded by 16.4 percent to 7.2m, while air traffic increased by 5.8 percent to 1.2m,” the Central Bank said.

“The most recent data provided by the Nassau Airport Development Company (NAD) [for Lynden Pindling International Airport] showed that total departures, net of domestic traffic, rose by 7.7 percent to 161,919 in August vis-à-vis the comparative 2025 period. Specifically, US departures grew by 4.9 percent to 137,266. In addition, non-US international departures increased by 26.7 percent to 24,653.

“In the eight months to August, total outbound traffic expanded by 5.7 percent to 1.3m. In particular, non-US international departures advanced by 32.8 percent to 0.2 million, while US departures grew by 1.3 percent to one million.”

As for vacation rentals, the Central Bank added: “Concerning the short-term vacation rental market, data from AirDNA revealed that total room nights sold grew by 14.8 percent to 42,979 in August, relative to the corresponding 2025 period.

“The occupancy rate for hotel comparable listings firmed to 47.6 percent from 43.2 percent a year earlier, and for entire place listings to 36.7 percent from 34.5 percent. Further, the average daily room rate (ADR) for entire place listings increased by 5.8 percent to $633.78, compared to the previous year. Similarly, the rate for hotel comparable listings moved higher by 5.1 percent to $157.97.”

Turning to July’s performance, the Central Bank said: “Official data from the Ministry of Tourism indicated that total arrivals rose by 16.8 percent to 1.2m visitors in

July, vis-à-vis the same period in 2025. Supporting this outcome, sea passengers advanced by 18.2 percent to one million, while air arrivals grew by 10 percent to 200,000.

“A breakdown by major port of entry revealed that total arrivals to Grand Bahama more than doubled to 177,167 relative to the same month in the prior year. Contributing to this outturn, sea arrivals increased to 171,336 from 64,916 last year, contrasting with a 10 percent decline in air arrivals to 5,831 visitors.

“Further, visitors to the Family Islands rose by 17.6 percent to 534,610 compared to the corresponding period of 2025, on account of a 17.9 percent rise in sea passengers to 495,185 and a 14.3 percent gain in air traffic to 39,425. In contrast, total visitors to New Providence declined by 2.8 percent to 482,291 relative to the same period last year, as the sea component fell by 7.3 percent to 339,494. However, air arrivals rose by 9.8 percent to 142,797 visitors.”

However, the Central Bank also took notice of the creeping increase in inflation and the return of cost of living pressures for many Bahamian families. “Average consumer price inflation, as measured by the All-Bahamas Retail Price Index, rose to 2.7 percent in the 12 months to June 2026 following a 0.2 percent decline in the same period of 2025,” it warned.

“Underlying this outturn, average costs increased for restaurants and hotels by 17.3 percent; for housing, water, gas, electricity and other fuels by 3.1 percent; for transportation, by 2 percent; and for communications, by 0.4 percent, after posting reductions in the year prior.

“Further, average inflation quickened for furnishings, household equipment and household maintenance (7.7 percent), health care (3.6 percent), and miscellaneous goods and services (3.1 percent). In a partial offset, inflation slowed for alcoholic beverages, tobacco and narcotics (5.4 percent); education (2.4 percent); clothing and footwear (2.2 percent); food and non-alcoholic beverages, (1.3 percent); and recreation and culture (0.8 percent).”

Still, the Central Bank gave a positive outlook for the remainder of 2026 and the full year despite ongoing global economic uncertainties and geopolitical tensions.

”Expectations are that the domestic economy will maintain its growth trajectory in 2026, relative to 2025, moderately exceeding its estimated medium-term potential,” it said.

“Tourism performance is anticipated to remain strong, bolstered by steadied improvements in high value-added stopover arrivals and robust growth in the cruise sector. Furthermore, several diverse foreign investment projects are anticipated to support growth in the construction sector.

“In the labour market, conditions are expected to improve further, underpinned by job gains in the tourism and construction sectors. Concurrently, heightened inflationary pressures remain, influenced by higher prices for fuel and imported goods, as a result of increased risks associated with the ongoing geopolitical tensions.”

The banking regulator continued: “In terms of fiscal developments, the Government’s net financing needs are projected to narrow as a result of increased revenue from tourism-related taxes and receipts from the minimum corporate tax. In addition, financing is anticipated to be satisfied through domestic and external borrowing, with the majority sourced domestically.

“In the monetary sector, banking sector liquidity levels are forecast to remain high, with a potential moderate reduction due to increased lending in the private sector. Against this backdrop, external reserves are forecast to fluctuate in line with 2025 levels, while remaining well above international standards and significantly adequate to sustain the Bahamian dollar currency peg.

“Nonetheless, downside risk to the outlook persists, as stopover demand from the dominant US source remains vulnerable to geopolitical tensions in Eastern Europe and the Middle East, as well as uncertainty surrounding global tariff policies. In addition, heightened energy prices may reduce short-term travel demand, fuel cost push inflation, raise financing costs tied to foreign investment, and delay expected reductions in the Government's borrowing costs.”