[RÉUNION] Q2 2026 Economic Outlook: business climate worsens as fuel costs and unemployment rise

Réunion's ICA falls 3.6 pts to 100.1 in Q2 2026 (IEDOM). Fuel prices +22.2% YoY, inflation +1.5%, Category A jobseekers +1.4% quarterly, IEDOM cash deposits -2.5%. Only tourism holds firm.

Réunion's business confidence indicator (ICA) fell 3.6 points in the second quarter of 2026, settling at 100.1 — its long-term average. According to IEDOM's latest economic trends report, the deterioration was driven by a surge in fuel prices and a rise in unemployment, in an increasingly strained economic environment.

Fuel and inflation: a dual shock

Fuel prices in Réunion soared +22.2% year-on-year through end-June 2026, pushing annual inflation to +1.5% — a sharp reversal from the 0% recorded in March. This cost pressure led many businesses to pass on price increases to consumers, while simultaneously reducing household mobility.

Labour market: a worrying reversal

Category A jobseekers (with no activity) rose +1.4% during the second quarter, ending three consecutive quarters of decline. Total jobseekers across all categories were up +1.6% over the period — a warning signal for an island economy that had only just begun a tentative recovery.

Commerce down, tourism resilient

Cash deposits recorded at IEDOM fell -2.5% year-on-year, signalling a slowdown in commercial transactions. However, new vehicle registrations rose +1.2%, and the tourism sector showed resilience, supported by dynamic air traffic (+1.3% over the quarter). Service sector companies largely reported that the economic climate had no impact on their activity.

Why it matters

Réunion enters the final months of 2026 in a fragile economic configuration: fuel pressure is weighing on both businesses and households, and the labour market is deteriorating after months of improvement. In this context, tourism — historically the island's economic engine — remains one of the few positive anchors, with record half-year revenues. Q3 indicators will be decisive.

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