BRIDGETOWN, Barbados – Stable economic growth and low inflation prevailed during 2025, even as global trade tensions intensified during the year. Tourism, business and other services, construction, and agriculture supported real GDP growth of 2.7 percent.
The unemployment rate ended the third quarter at 6.6 percent, while jobless claims increased modestly during 2025. Lower international oil and freight costs eased inflation pressures despite higher global tariffs, and the 12-month moving average inflation rate slowed to 0.7 percent by November 2025. Higher housing and utility costs, together with stronger demand for dining services, lifted point-to-point inflation to 1.7 percent in November.
Barbados sustained strong external buffers through the year. International reserves totalled $3 billion at end-December, supported by stronger tourism receipts and inflows for tourism-related projects, which partly offset wider merchandise trade and income account deficits.
The government maintained fiscal discipline while boosting priority investment. Even with significant spending on public infrastructure, government recorded a primary surplus of $541.7 million, equal to 3.3 percent of GDP, and a small overall deficit of $2.4 million, equal to 0.01 percent of GDP. Economic expansion, the GDP rebasing effect, and the primary surplus reduced the debt-to-GDP ratio by 2.1 percentage points to 94.6 percent at end-December 2025.
Financial system conditions remained sound as credit growth strengthened. Lending to the non-financial private sector expanded by 5.2 percent alongside continued improvements in credit quality. Liquidity eased in line with higher lending but remained elevated, and profitability stayed steady, keeping banks well capitalised.
