• The Bahamas’ national debt increased by $1.071Bn, or 8.8%, year-over-year to $13.17Bn at the end of June 2026, according to the Central Bank of The Bahamas’ Q2 2026 Economic Review. The increase reflected nearly $700Mn in additional direct government debt and a $373.5Mn rise in contingent liabilities.
• The Government’s direct debt stood at $12.47Bn, up $697Mn, or 5.9%, year-over-year, despite declining slightly during Q2. Meanwhile, contingent liabilities increased to $703.4Mn, partly reflecting government-guaranteed borrowing related to the Grand Bahama Power Company acquisition, LNG energy reforms and the Public Hospitals Authority.
• As a share of GDP, direct government debt declined by 0.2 percentage points year-over-year to 70.7% at end-June. However, the national debt-to-GDP ratio increased to 74.7% from 72.8% in Q2 2025, while total public sector debt rose to 77.3% of GDP.
• The increase in debt comes despite a comparatively smaller $121.2Mn fiscal deficit at end-April 2026 and the Government's projection, as late as end-June, of a $32.7Mn Budget surplus for FY2025/26. The divergence has raised questions over the relationship between reported fiscal balances and the increase in government borrowing.
• The Fiscal Responsibility Council also raised concerns about deviations from the Government’s FY2025/26 Annual Borrowing Plan and the transparency of its financing disclosures. Notably, Central Bank advances increased by $290.3Mn during the nine months to end-March 2026, despite this source of financing not being included in the borrowing plan. The Council called for explanations where material deviations occur and greater consistency in reporting actual financing against planned borrowing.
• The increase in the debt-to-GDP ratio despite a decline in the direct government debt ratio highlights the growing impact of contingent liabilities on the wider public debt position. With government guarantees linked partly to energy and public-sector initiatives, the extent to which these obligations ultimately require government support will remain important for The Bahamas’ fiscal and debt trajectory.

(Source: The Tribune)

• Brent crude futures breached $100 a barrel on Wednesday for the first time since late July, as Iran and the U.S. hit tankers in the ​biggest wave of attacks on shipping since the war began, threatening to worsen the ongoing impairment of energy supplies from the Middle East.
• Front-month Brent crude futures were up $3.40, or 3.5%, at $101.32 a ‌barrel after touching a high of $101.55. U.S. West Texas Intermediate crude was up $3.45, or 3.7%, at $96.48 a barrel, highest since early June.
• Since late May, oil benchmarks have generally traded well below the $100-per-barrel psychological threshold, reflecting expectations that the conflict would remain on a low simmer. Optimism rose in particular after the U.S. and Iran came to a temporary agreementto cease attacks, even though a permanent peace deal had not been reached. That calculus has been shifting of late with the resumption of strikes. Iran ​said on Wednesday it had attacked 10 ships near the Strait of Hormuz and the U.S. sank five Iranian oil tankers, in a sharp escalationof the six-month-old war.
• Futures prices are moving closer to physical crude and fuel markets, where the reality of tight supply has been apparent for the bulk of the conflict. Since the Iran war began on February 28, Brent has surged as high as $126.41 a barrel, a peak reached on April 30 but had only briefly touched $100 a barrel in late July after retreating below that threshold in late May.
• Higher oil prices have also translated into higher bond yields and borrowing costs for the U.S. government and for consumers by extension. On Tuesday, two-year Treasury yields, which are among the most sensitive to potential inflation, hit their highest level since November 2024. The 10-year Treasury yield, which heavily influences consumer borrowing rates, rose to 4.812%, which was just short of its highest level since November 2023.
• Traders are now pricing in about a 60% chance of an interest rate hike at the Fed's September 15 to 16 policy meeting, according to the CME FedWatch Tool, up from about 50% before the jobs data. Stocks were less affected by oil prices than bonds were. Nonetheless, the S&P 500 closed down 0.58%, while the Nasdaq Composite ended the day lower by about 0.3%.

(Source: Reuters)

• Canada's retaliatory tariffs on U.S. goods took effect after midnight on Tuesday, intensifying an 18-month-old trade war ​and spurring Prime Minister Mark Carney to urge a further shift away from the country's biggest trading partner.
• The Canadian levies follow 50% tariffs the United States ‌imposed on some $20 billion of Canadian goods last month, after several rounds of negotiations collapsed. The breakdown has widened a rift between the longtime allies, both of whom have blamed the other for the failed talks.
• Ottawa designed the retaliatory measures to put economic and political pressure on Washington, Canadian government officials said, and the tariffs ​are expected to hit sectors in some competitive states such as Michigan and Ohio, ahead of U.S. midterm elections in November.
• Gabriel Brunet, spokesperson for ⁠Dominic LeBlanc, Canadian minister responsible for bilateral U.S. trade, said: "Canadian and American officials have maintained ongoing discussions on a range of issues, although formal trade negotiations are not taking place at this stage."
• Ottawa's counter-tariffs cover some $20 billion of U.S. goods, with duties ranging from 15% to 50% across products from steel and furniture to clothing and electronics.
• While the new tariffs affect a small amount of ​exports compared with total trade between the U.S. and Canada, some analysts worry the standoff could destabilise the U.S.-Mexico-Canada Agreement, the free-trade pact that succeeded NAFTA. Together, they have underpinned commerce across North America for decades.

 (Source: Reuters)

• BMI now expects Jamaica’s economy to contract by 0.9% in 2026, better than its previous forecast of a 1.1% decline, before rebounding by 2.3% in 2027 as recovery from Hurricane Melissa continues.
• Real GDP fell 4.1% year over year in Q1 2026 amid broad-based sectoral weakness, following a 7.1% contraction in Q4 2025 after the hurricane’s October landfall. The contraction was less severe than BMI and official forecasts had anticipated, supporting the upward revision. Seasonally adjusted data also showed Q1 2026 growth improving relative to Q4 2025, signalling early recovery momentum. Consumption remained comparatively resilient. Wholesale and retail trade were nearly flat, with sequential improvement from the previous quarter and inflation still relatively contained – despite supply-side disruptions.
• BMI expects growth to resume in Q4 2026 and continue into 2027, supported by a broad-based recovery across industries. Fiscal stimulus should provide an additional tailwind, while the Bank of Jamaica is expected to gradually lower interest rates in 2027 as inflationary pressures fade.
• BMI remains moderately upbeat on domestic demand despite near-term inflation pressure. Remittances should continue to support household spending, even as inflows normalise from post-hurricane levels. A stable labour market, including nearly 30,000 jobs added in Q2, together with fiscal stimulus and steady monetary policy, should help limit the depth of the downturn.
• The newly established National Reconstruction and Resilience Authority should help mobilise private investment and public projects. In addition, the restoration of power to nearly the entire island is an important recovery milestone, while the marginal rise in electricity consumption in July 2026 points to improving activity.
• Risks remain tilted to the downside despite the less severe-than-expected contraction. Renewed tensions between Iran and the U.S. have pushed oil prices higher, raising the risk of stronger domestic inflation and potentially tighter monetary policy. Ongoing hurricane recovery also leaves the economy vulnerable to another major storm, while El Niño-related drought and hotter temperatures could weigh on agriculture and overall output in the near term.

• Jamaica’s foreign policy remains anchored by its longstanding relationship with the United States, even as the government continues to broaden ties with China, regional partners and other international counterparts.
• Deep economic links with the U.S. span tourism, remittances and trade, while security cooperation has strengthened following the August 2026 signing of a Status of Forces Agreement. The agreement establishes the legal framework for U.S. military personnel and activities in Jamaica. It reinforces the countries’ longstanding security partnership and signals closer cooperation on defence and regional security.
• In a January 2026 call, Prime Minister Andrew Holness and U.S. Secretary of State Marco Rubio reaffirmed their commitment to sustained cooperation. Discussions covered hurricane recovery assistance, U.S. support for reconstruction, Jamaica’s progress in reducing crime, the country’s role in anti-gang operations in Haiti and the upgrade of the U.S. travel advisory from Level 3 to Level 2 – a positive development for Jamaica’s storm-affected tourism sector.
• At the same time, China remains an important infrastructure and trade partner. Chinese investment continues to support Jamaica’s infrastructure ambitions, while rising imports of machinery and other capital goods point to a deeper trade relationship. This balancing act extends beyond the two major powers, with the Holness administration also strengthening ties across the Caribbean and with other global partners.
• Jamaica has also entered regional agreements designed to improve security cooperation and economic integration. These include the Alliance for Security, Justice and Development, an Inter-American Development Bank-backed initiative involving 18 Latin American markets to strengthen cooperation against transnational crime. In July 2025, Jamaica also signed an agreement with Barbados, Belize, Saint Vincent and the Grenadines, and Dominica to permit the free movement of Caribbean nationals under the CARICOM Single Market and Economy.
• Overall, Jamaica’s approach points to continuity rather than a major foreign-policy shift. The country is likely to preserve its close U.S. relationship while continuing to welcome Chinese investment and deepen regional partnerships, giving it more room to pursue economic opportunities across multiple fronts.

(Source: BMI, A Fitch Solutions Company)

• The Bahamian economy maintained positive momentum in Q2 2026, supported by stronger tourism activity and ongoing construction-related investment.
• According to the Central Bank of The Bahamas’ (CBOB) Quarterly Economic Review, growth was led by a rebound in high-value stopover arrivals and continued expansion in cruise tourism.
• Tourism sector output maintained healthy gains during the quarter. In the private vacation rental market, total room nights sold increased by 7.7% to 170,989, with bookings for hotel-comparable listings rising 12.5% to 66,155 and entire-place listings increasing 5.0% to 104,834.
• Performance indicators also strengthened, with the average occupancy rate for hotel-comparable listings increasing by 2.9 percentage points to 51.8%, while occupancy for entire-place listings moved higher by 1.1 percentage points to 51.6%. Average daily rates rose 6.8% to US$760.39 for entire-place listings and 1.7% to US$175.68 for hotel-comparable listings.
• According to data from Nassau Airport Development Company Limited, quarterly total departures, net of domestic passengers, rose by 5.4% year-over-year to 0.5Mn. Non-US international traffic expanded by 24.5%, while US departures, which accounted for 83.9% of total passengers, grew by 2.4%.
• Small- to medium-scale foreign investment projects also supported construction activity through residential, resort and private cruise destination developments. Broader economic indicators remained aligned with medium- to long-term trends.
• Meanwhile, the latest labour market data for Q4 2025 showed that the unemployment rate decreased relative to both the previous quarter and Q4 2024. However, inflationary pressures increased, reflecting the pass-through effects of higher global oil prices on imported fuel and other goods and services.
• The Bahamas’ positive growth momentum appears to have extended into Q3, with the CBOB’s July 2026 data showing that tourism output growth strengthened. Total departures from Nassau, net of domestic traffic, increased by 7.1% year-over-year, while vacation-rental room nights sold rose 10.5%. However, the CBOB continues to flag geopolitical pressures and higher imported fuel costs as headwinds to the outlook.

(Sources: The Nassau Guardian & Central Bank of The Bahamas)

• Panama’s economy appears to be entering a stronger growth phase as confidence improves and the major sources of uncertainty that weighed on activity over the past two years begin to fade, according to UBS.
• UBS estimates that Panama’s real GDP will grow by around 5% in 2026, driven by increased household consumption, the recovery of the construction sector, tourism and activities related to the Panama Canal. The firm highlighted that growth reached 5.5% in H1 2026, the strongest performance among major Latin American economies during the period.
• The report also highlighted an improvement in Panama’s fiscal accounts. UBS described the adjustment made by the authorities as “one of the firmest and deepest in recent years among the economies of the Americas,” supported by a reduction in the fiscal deficit and a more stable debt trajectory.
• Panama maintains a favourable position due to the strength of its dollarised system and the increase in private deposits. Since 2024, private sector deposits have increased by approximately US$5Bn to US$6Bn annually, equivalent to about 5% of GDP. However, UBS noted that this liquidity has not yet translated into greater local credit growth.
• Although President José Raúl Mulino’s popularity has declined significantly, UBS noted that the administration has advanced key reforms, improved fiscal performance and maintained strong relations with the United States.
• The Panama Canal also remains a core source of support for the economy. It is expected to remain an important contributor to economic and fiscal activity. Notably, the Panama Canal Authority is projecting US$5.56Bn in revenue and US$3.61Bn in contributions to the national treasury for FY2027, US$414Mn above the amount approved for FY2026. However, potentially difficult water conditions and the possibility of a strong El Niño present downside risks to Canal activity, which could temper one of the key drivers of Panama’s stronger growth outlook.

(Sources: News Room Panama & Reuters)

• UK finance minister John Healey used his first major speech since taking office to present a more optimistic economic message ahead of a difficult budget that is expected to involve tough tax and spending decisions.
• Speaking at a manufacturing hub in central England, Healey announced plans to give city regions more power to attract private investment as part of Prime Minister Andy Burnham’s devolution agenda. He also reiterated his commitment to fiscal discipline and pledged to reduce regulatory costs by 25% before the next election, due in 2029.
• However, much of Healey’s agenda echoes the priorities of his predecessor, Rachel Reeves, and former prime minister Keir Starmer, including a focus on growth, lower regulation and easing the cost of living.
• Healey’s challenge was underscored during the speech by news that Jaguar Land Rover plans to cut 4,000 jobs worldwide over the next two years. Asked about the threat to employment, he said the announcement showed why the government must broaden growth across Britain rather than rely on a few major economic centres.
• Healey declined to comment on tax plans before his October 28 debut budget. Investors remain concerned about inflation risks from higher oil prices, shrinking fiscal headroom and rising spending commitments.
• Healey and Burnham have pledged to keep the fiscal rules adopted by Starmer and Reeves, including a target to balance day-to-day spending with tax revenues by the end of the decade. However, Burnham’s plans for expanded social care and higher defence spending are likely to keep pressure on Healey to raise additional tax

(Source: Reuters)

• Iran’s latest warning that S.-linked energy infrastructure in the Gulf could be targeted highlights the risk of further escalation and renewed disruption to global energy flows. The threat followed another exchange of attacks over the weekend, with no clear sign of diplomatic progress after more than six months of conflict.
• Iran has tightened restrictions on shipping through the Strait of Hormuz, a critical artery for global oil and gas supplies, since the war began with U.S. ​and Israeli strikes on February 28.
• On Sunday, senior Iranian security official Mohsen Rezaei said Tehran would soon announce a new restricted zone in the Gulf and unveil a new shipping corridor through the Strait of Hormuz. He said the zone would begin where a U.S. naval blockade of Iran starts and extend into parts of the Gulf, with any vessel entering the area placed on an Iranian sanctions list.
• The attacks have fuelled fears of a ​renewed Israeli military campaign despite a June ceasefire with the Iran-backed Hezbollah group. They also complicate efforts to end the wider conflict, with Tehran insisting that any lasting agreement with Washington must ​include an end to Israeli attacks in Lebanon.
• Tehran’s clerical rulers remain in power and aim to emerge from the war in a stronger position. They continue to demand sanctions relief and hope eventually to collect fees from ships using the Strait of Hormuz, which carried about one-fifth of global oil and liquefied natural gas shipments before the war. After a relative lull through much of August, hostilities have intensified again following the collapse of an interim ceasefire reached in June, while diplomatic efforts have made little headway.

 (Source: Reuters)

• Jamaica welcomed 2.34Mn visitors and generated approximately US$2.50Bn in tourism earnings as at August 31, 2026. However, arrivals and earnings remained 17.0% and 18.0% below the corresponding 2025 levels, respectively, reflecting the lingering effects of Hurricane Melissa on the sector’s operating capacity and softer demand amid elevated travel costs.
• The decline in arrivals primarily reflects the combined impact of reduced accommodation and airlift capacity, although higher airfares have likely also weighed on demand. Approximately 70.0% of the country’s room stock is currently operational, with several high-demand properties among the remaining 30.0% that are still offline.
• Demand for Jamaica has nevertheless remained relatively firm, with visitor arrivals recovering faster than room inventory. Airlines have maintained their routes to the island, with available flights reportedly operating at high load factors, which has helped preserve the country’s relationship with airline partners
• However, airlift remains below pre-hurricane levels and continues to face both domestic and global constraints. Reduced service on key US routes and the loss of Spirit Airlines have limited lower-cost seat availability to Jamaica. More broadly, delayed aircraft and engine deliveries, spare-parts shortages and constrained maintenance capacity are restricting airlines’ ability to expand fleets and routes. These pressures, together with elevated fuel costs, have raised operating expenses and contributed to higher airfares.
• The recovery also faces external headwinds from the global aviation industry, where elevated oil prices, due to the US-Iran conflict, have translated into higher airfares and limited airlift capacity. Elevated travel costs could temper demand, particularly among price-sensitive visitors, and slow the conversion of restored room inventory into stronger arrivals and tourism earnings.
• The restoration of the remaining room stock is expected to extend from late 2026 into Q1 2027, limiting the pace at which visitor arrivals and earnings can return to pre-hurricane levels. This timeline is consistent with the Government’s earlier expectation that room capacity would approach 95.0% by December 2026 and be fully restored during Q1 2027.
• Near-term tourism activity is therefore likely to remain below its 2025 performance, as accommodation shortages, reduced airlift and elevated travel costs constrain the recovery. However, average expenditure per visitor remained relatively stable at approximately US$1,068, compared with US$1,082 in the prior year, indicating that the decline in tourism earnings has been driven primarily by lower arrivals rather than weaker visitor spending. The phased reopening of major properties should support a stronger recovery through late 2026 and into 2027, providing an important lift to services exports and broader economic activity.

(Sources: JIS & NCBCM Research)