The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas would have seen “a phenomenal amount of jobs” created with the economy growing by almost 4 percent in real terms during 2025, a senior banker has suggested.

Gowon Bowe, Fidelity Bank (Bahamas) chief executive, told Tribune Business he was not “discrediting or suggesting that the numbers are inaccurate” following Friday’s advance gross domestic product (GDP) growth estimates unveiled by the Bahamas National Statistical Institute (BNSI) but, rather, questioning whether they were comparing “like-for-like” in terms of measurement methodologies used and the amount of economic data capture.

He spoke out after the Institute unveiled GDP, or economic output, growth estimates for 2025 that were up to a percentage point higher than those provided by both Central Bank governor, John Rolle, and the International Monetary Fund (IMF).

Its 3.8 percent real GDP growth estimate, using a measurement that strips out the effects of inflation, suggests the Bahamian economy enjoyed strong economic expansion and job-creating activity last year. This exceeds both Mr Rolle’s projection of Bahamian economic growth “at a rate close to 3 percent” in 2025, and the IMF’s own 2.8 percent forecast.

The data unveiled by the Institute also showed The Bahamas’ economic output increased by more than half-a-billion dollars in 2025, rising by $557.6m from $14.671bn in 2024 to $15.229bn last year. This nation’s nominal growth rate, which includes the impact of inflation, was even higher at 7.1 percent.

However, Kwasi Thompson, the east Grand Bahama MP, yesterday challenged whether all Bahamians were feeling, seeing and enjoying tangible benefits from the growth projected by the Institute. And he noted that real economic output in key sectors such retail, wholesale and motor vehicle repairs was down compared to 2024 numbers, while household consumption spending was relatively flat in 2025, growing by just $25.6m year-over-year to hit $8.411bn.

“The latest GDP report from the Bahamas National Statistical Institute confirms that the Bahamian economy continued to grow in 2025, and every Bahamian should want to see our country succeed,” he told Tribune Business. “But the truth is this: Far too many Bahamians are still not feeling the benefits of this growth in their every day lives. Yes, the economy grew. But so did the pressure on families trying to afford groceries, electricity, rent and basic necessities.”

Mr Bowe made similar, but more nuanced, points. He said that the respective nominal and real GDP growth rates of 7.3 percent and 3.8 percent signalled that The Bahamas had suffered a 3.5 percent inflation rate in 2025, yet he argued that this indicator declined in 2025 as the full impact of the Trump tariffs was not truly felt and oil prices remained relatively stable prior to the start of this year’s Middle East conflict.

“No one’s saying we had inflation at 4 percent and, equally, to say we had nominal growth of 7 percent, that would be a phenomenal amount of jobs in terms of activity,” the Fidelity chief said. “The question I ask is which sector is seeing that?” The national Bahamian unemployment rate even spiked at 10.8 percent in the 2025 first quarter before dropping to 9.3 percent in the second, but no major hiring or job-creating surge was reported or seemed apparent.

Focusing on tourism, Mr Bowe said: “We have a number of hotels in renovation or the redevelopment stage. We had Exuma (Sandals) closed for 2025, we have had Atlantis’ Beach Towers closed for quite a while. Certainly, when we look at the tourism numbers, we had flat or contracting stopover visitors and all the growth coming in cruise passengers and no increase in cruise passenger spending.

“If tourism is 60 percent of the economy, did we see growth in tourism-related businesses and an expansion of properties? It’s not a negative that we see a lot of properties in the development stage. But we have challenges with airlift to the Family Islands and airport connectivity… We have to make the numbers make sense.”

Mr Bowe suggested another factor behind the strong 2025 GDP growth estimates may have been activity which, although known of for a long time, was not being properly captured or recorded until last year. As examples, he cited the cruise industry’s private island destinations, where the Government has sought to generate increased tax revenues, and the construction industry which remains the last sector without self-regulation.

“What was the activity we are seeing on a like-for-like basis to achieve this level of growth?” Mr Bowe asked. “It’s really to ensure that we temper the expectations of the population. We’ve had the general sentiment that we need a period of growth before we take on tax increases. The numbers suggest we should be in the business of taking on tax increases because the economy is growing at a fast pace.

“That’s not the sentiment from businesses. Businesses always take the most pessimistic view even when they are doing well. Certainly, the clarion call by most businesses is things remained rough during 2025. If we have that type of growth, is it the businesses misrepresenting that expansion or is this activity that previously existed that went unrecorded.”

Mr Thompson, meanwhile, said the Institute’s report “shows warning signs beneath the surface”. He added: “Wholesale and retail trade, the sector most connected to ordinary consumers and small businesses, declined in 2025. Household spending barely moved. That tells us something important: Growth is happening, but many Bahamians are still struggling to get ahead.”

Value-added by the wholesale, retail and motor vehicle repairs sector fell slightly in 2025, declining to $1.597bn compared to $1.665bn the year before, while household GDP rose slightly from $8.385bn to $8.411bn. “The decline in arts, household employment and other community-based services suggests that while the economy is growing at a high level, many ordinary Bahamians and smaller service sectors are still not fully feeling the benefits of that growth,” the Opposition MP added.

“The report also shows that much of the growth came from tourism and finance, and increased government spending. Those sectors matter, but the Bahamian people are asking a bigger question: Where is the broad-based opportunity? Where is the relief for small businesses? We believe the next Budget must focus directly on helping ordinary Bahamians feel the benefits of economic growth.

“The Government should introduce more meaningful cost of living relief and measures to reduce electricity costs for families and small businesses. There must also be stronger support for small businesses through access to affordable financing, faster government payments, and reforms that make it easier to operate and grow a business in The Bahamas,” he added.

“At the same time, we need a serious national jobs initiative. Economic growth must also be matched by fiscal responsibility and accountability. Bahamians deserve transparency in public spending and responsible management of the country’s finances. The next challenge for our country is making growth meaningful, sustainable and inclusive.”

The Institute, in its statement, said: “Real growth was driven primarily by the financial and insurance activities; transport and storage; accommodation and food services and construction industries, which accounted for the largest share of the growth. In 2025, the value added generated through the production of goods and services in the Bahamian economy was estimated at $17.2bn in current prices, and $15.2bn in constant prices.”

Breaking this down, it added: “The financial and insurance activities sector exhibited growth, expanding by approximately $203m, which represents a 20 percent increase year-over-year. This upward movement was driven predominately by the insurance industry sub-sector, which experienced a growth in total premium income.

“The accommodation and food services sector increased by approximately $79m (5 percent). The accommodation Industry was responsible for the majority of the increase in this group.

“The construction industry increased by approximately $80m or 9 percent. This increase is mirrored in the rise of imports of construction materials. Preliminary reports of building construction statistics in 2025 indicate a growth in both the number and value of construction completions. The transport and storage sector increase by $47m or 7 percent. Marine transportation was the primary driver of this increase, leading by an 18 percent increase in its value added.”

The Institute, turning to the so-called ‘expenditure approach’ for calculating GDP, said: “Gross fixed capital formation or investments showed an increase in 2025 compared to 2024 of 8 percent. Building and infrastructure investments led this growth with approximately $228m or 9 percent, followed by transport equipment that grew by $83m or 50 percent.

“General government final consumption experienced real growth in 2025 of $188m or 9 percent when compared to the previous year. Government consumption is measured by the sum of costs. This growth contains a combination of wages and salaries; depreciation; and purchases of goods and services.

“Exports of goods and services increased by $107m or 2% percent in 2025 compared to 2024. This sector includes the contribution to the economy by tourism, which includes both stopover and cruise visitor spending and represents the bulk of total exports of services.”