Barbados’ economy has now expanded for 21 consecutive quarters.
However, with international uncertainty – especially the war in the Middle East taking a toll – economic growth has slowed.
Central Bank Governor Dr The Most Honourable Kevin Greenidge reported this today as he reviewed Barbados’ economic performance between January and June.
“Barbados’ economy continued to expand during the first half of 2026, with domestic sectors again leading growth. Real GDP grew by an estimated 1.4 per cent, as the non-traded sector expanded by 1.5 per cent,” Greenidge said during his second quarter press conference at the Courtney Blackman Grande Salle.
“Business and other services drove that expansion, with wholesale and retail trade also contributing and construction recording modest growth.”
Greenidge added: “Tourism value added, which accounts for about half of traded output, remained close to its level a year earlier. Long-stay arrivals edged higher, but shorter average stays reduced visitor nights.
“Agriculture added to growth, while manufacturing output remained broadly unchanged.”
This performance meant that “domestic activity therefore sustained overall economic growth in a more challenging global environment marked by heightened geopolitical tensions, trade uncertainty, and softer demand in several key tourism source markets”, he noted.
The Central Bank now expects the economy to grow by approximately two per cent in 2026, what the Governor called “the lower end of the two to three per cent range published at the end of the first quarter”.
“Reaching approximately two per cent for the year requires second-half output to expand by approximately 2.5 per cent relative to the second half of 2025. The forward indicators support an acceleration of that order,” Greenidge said.
In the economic review, he said labour market indicators remained broadly favourable, including an unemployment rate of 6.1 per cent at the end of March 2026, while unemployment claims “fell by 3.7 per cent during January to June”.
Barbados’ international reserves were $3.1 billion, a $91.8 million increase over the December 2025 figure. This is equivalent to 25.9 weeks of import cover.
Greenidge said: “Strong buffers give Barbados the capacity to withstand shocks, but the full-year growth outcome will depend on faster investment execution, stronger productivity, and improved traded -sector performance.
“Prudent fiscal management and the timely delivery of public and private investment s will determine how much of the projected acceleration materialises.” (SC)