Bahamas celebrates boost in global credit ratings

Bahamian Prime Minister Philip Davis highlighted that the government’s initiatives to manage debt and introduce new energy reforms have resulted in Standard & Poor’s (S&P) decision to maintain The Bahamas’ credit rating with a stable outlook. S&P’s analysis predicts a 1.8 percent growth in the Bahamian GDP for 2024, which is slightly lower than the International Monetary Fund’s (IMF) forecast of 2.3 percent and the Bahamian Central Bank’s estimate of over 2 percent growth.

S&P has reaffirmed The Bahamas’ long-term credit rating at ‘B+’, praising the country’s “robust recovery” following the COVID-19 pandemic and recognizing the government’s fiscal consolidation efforts that have significantly decreased the deficit and managed debt levels.

“This report comes three years into our term, marking a moment to acknowledge the progress we have made together while recognizing that much work remains,” Davis remarked.

“When we assumed office, our nation was in crisis,” he elaborated. “The previous administration’s management of the pandemic led to significant health and economic challenges, with national debt increasing by US$2.4 billion in just two years.”

Davis pointed out that the situation was dire at that time, with widespread concerns about a potential rise in value-added tax (VAT) and even the possibility of currency devaluation. Bahamian businesses faced hardships due to misguided lockdowns and curfews, hospitals were overwhelmed, and schools were closed and in disrepair.

Nonetheless, Davis asserted that his administration has made notable strides in reversing these adverse trends, although he acknowledged that much work still lies ahead.

“A global inflation crisis has severely impacted Bahamian families. There are no simple solutions or quick fixes, so we are confronting the country’s most challenging issues directly,” Davis stated. He emphasized that his government is implementing the nation’s first comprehensive energy reforms, modernizing the electricity grid, and introducing solar power and natural gas to the islands.

He underscored that thorough, nationwide energy sector reform is essential for lowering electricity costs and enhancing reliability—both vital for supporting Bahamian families and businesses, as well as fostering sustainable and inclusive economic growth.

Davis also mentioned that The Bahamas is actively building and strengthening global partnerships, reinforcing its borders, and advocating for policies that benefit small island nations like The Bahamas, thereby creating more opportunities for its citizens.

In response, Shadow Finance Minister J. Kwasi Thompson raised concerns regarding the report, noting that S&P expects a slowdown in economic growth to 1.8 percent in 2024. He pointed out that the agency indicated The Bahamas’ “below-average long-term growth performance compared to other nations at a similar level of development.”

Thompson remarked that S&P’s analysis presents a “somewhat bleak picture” of The Bahamas’ economic outlook. -(CMC)