Stopover Decline, Lower Inflows Weigh on Growth, But Central Bank Sees Late-Year Lift

• The Bahamian economy grew moderately in the first half of 2025, slowing from 2024 due to softer stopover tourism and a nearly two percent decline in external reserves. However, the Central Bank is forecasting stronger tourism receipts later this year, driven by higher hotel rates and increased forward bookings despite steady occupancy.
• During the Central Bank’s quarterly press briefing, Governor John Rolle acknowledged the challenges facing the tourism sector and the broader economy. Some of the key challenges include U.S. travel advisories against travel and the tourism sector’s vulnerability to natural disasters, both of which pose significant risks to the broader Bahamian economy, given tourism’s central role as a primary economic driver.
• Governor Rolle further noted that data from the Central Bank shows that while stopover arrivals dipped slightly, average room rates rose, helping to offset the decline. The vacation rental segment experienced nearly a 10% rise in room sales, supporting overall tourism receipts. Meanwhile, cruise visitor numbers continued to grow steadily, providing additional revenue.
• The softer tourism growth early this year contributed to a 2.0% drop in external reserves by late July compared to the same period in 2024, reflecting the more tempered inflow of foreign currency. Commercial banks’ purchases of foreign currency from the private sector, which correlate with tourism, investments, and other activities, rose only 1.3% in the first half of 2025, down from 2.2% in the same period last year.
• Governor Rolle also noted that credit growth remained firm, with domestic banks increasing lending across consumer loans, mortgages, and commercial activities. Credit risk improved, with non-performing loans dropping from nearly 6 percent in 2024 to about 5 percent by mid-2025.
• Looking ahead, Governor Rolle conveyed cautious optimism, noting that analyses of online travel platforms, forward bookings, and pricing data indicate stronger hotel sector revenues for the remainder of 2025 compared to the latter half of 2024. This projected improvement is attributed to higher average room rates, although no corresponding increase in occupancy is currently anticipated.

(Source: Eyewitness News