The economy is entering the budget year from a weak growth position. Real GDP contracted by 0.6% in 2025, meaning the budget is being implemented in a fragile environment where policy must both stimulate recovery and protect vulnerable groups.
Tourism weakness is the largest macroeconomic concern. Tourism accounts for approximately 21% of GDP, but the sector contracted by 5%, with total arrivals down 5.6% and stayover arrivals down 2.5%. This directly affects hotels, restaurants, transport, entertainment, agriculture, retail, and foreign exchange earnings.
Private sector demand is under pressure. Wholesale and retail trade, which contributes about 10.7% of GDP, contracted 2.3%. This suggests weaker consumer spending and reduced commercial activity, which is especially important for Chamber members and SMEs.