Durrant Pate/Contributor

Barbados is projected to record another year of solid economic growth in 2026 based on the latest soundings from its Central Bank.

The Central Bank of Barbados advises that the economy is expected to remain on a strong growth path in 2026, following an expansion of 2.7 per cent in 2025. 

This marked the fourth consecutive year of economic improvement. Although Central Bank Governor Dr Kevin Greenidge is cautioning that global uncertainty, geopolitical tensions, and climate-related risks could weigh on performance in the period ahead, he told reporters at the Bank’s headquarters in Bridgetown on Wednesday that the economy is expected to remain on a strong growth trajectory.

“Real GDP is expected to expand between 2.5 per cent and 3 per cent in 2026, before edging up to a medium-term growth rate of around 3.5 per cent, given current conditions,” Dr Greenidge said while reviewing the country’s economic performance over the past year explaining that the growth outlook continues to be driven by sustained expansion in tourism, business and other services, and construction activity across both the private and public sectors.

 On the inflation front, Dr Greenidge said price pressures are expected to remain subdued.

According to him, “Inflation is currently tilted towards the lower end of the range of one per cent to 2.5 per cent…For 2026, we expect the twelve-month moving average inflation rate to be closer to one per cent, before settling around two per cent to 2.5 per cent over the medium term.” Dr Greenidge added that lower global commodity prices, including energy costs, are likely to help dampen imported inflation. 

Cautioned about upward pressure on some prices

However, he cautioned that rising domestic demand could place upward pressure on prices for certain services, potentially moderating the overall inflation outlook. 

The Central Bank Governor gave assurances that Barbados’ public debt is expected to continue its downward trajectory, supported by ongoing economic expansion, rising primary surpluses, and sustained fiscal discipline.

“Debt is well on its path, and in some cases even declining faster than expected,” Dr Greenidge said. “We anticipate debt levels reaching approximately 60 per cent of GDP by the 2035/36 fiscal year. This remains the anchor of the Barbados Economic Recovery and Transformation programme, as it has been since its inception in 2018. This trajectory creates the necessary fiscal space for priority government investment, while safeguarding long-term sustainability.”

Despite the positive outlook, Dr Greenidge warned that risks remain on both the upside and downside.

 He noted that slower-than-expected global growth could reduce demand from Barbados’ key source markets, particularly the United States, with potential implications for tourism performance. The Barbados Central Bank boss also pointed to heightened global political tensions, especially in oil-producing regions, which could trigger spikes in energy prices and renewed inflationary pressures. 

Rising global uncertainty, he added, could further increase shipping costs and import prices. On the domestic front, Dr Greenidge further cautioned that adverse weather events could disrupt local food production, posing additional risks to the economic outlook.

 At the same time, he said the outlook could be strengthened by stronger-than-expected tourism activity, a faster roll-out of infrastructure projects, and continued progress in housing and renewable energy initiatives. 

He cited the pending launch of Bim Pay, the national digital payments system, as one development that could support economic efficiency and growth in the near term.