Central Bank of Barbados' Review of Barbados' Economy: January-September 2026

Barbados sustained economic growth during the first nine months of 2026, as growth in the non-traded sector offset weaker performance in the traded sectors. Real GDP expanded by an estimated 1.4 percent, compared with 2.3 percent in the corresponding period of 2025. The non-traded sector grew by 1.8 percent, as expansion in business and other services and in wholesale and retail trade outweighed a marginal decline in construction. In contrast, the traded sector contracted by 0.6 percent as tourism and manufacturing activity weakened. Domestic activity therefore remained the principal source of growth, although the expansion became less broadly based in a challenging international environment.

Tourist arrivals demonstrated resilience, but shorter visitor stays constrained the sector’s contribution to economic growth. Long-stay arrivals increased marginally by 0.2 percent, while in-transit cruise arrivals rose by 17.3 percent. However, shorter average stays reduced visitor nights, contributing to a 1.2 percent decline in tourism value added. Higher hotel room rates supported accommodation revenues, although occupancy levels fell. These developments highlight the importance of strengthening visitor spending and tourism earnings, alongside growth in arrival numbers.

Labour market conditions showed mixed results, while inflation remained moderate despite some upward pressure. The unemployment rate increased to 6.6 percent in the second quarter of 2026, from 6.1 percent a year earlier, as labour force growth outpaced employment gains. However, unemployment claims declined by 6 percent during January to September, providing a more encouraging recent indicator. The 12-month moving-average inflation rate reached 1.5 percent in July, compared with 0.5 percent a year earlier, reflecting higher prices for food, utilities and several household services. Government measures to contain domestic fuel and electricity costs continued to cushion the impact of rising international energy prices.