NASSAU, Bahamas, CMC—The Bahamas government has welcomed the latest report from the US-based global credit ratings agency Standard & Poors (S&P), which acknowledged the country’s “robust” recovery and reduction in the fiscal deficit.
S&P, in its analysis, projected that Bahamian economic output, or gross domestic product (GDP), will grow by 1.8 percent in 2024, slightly lower than the 2.3 percent projected by the International Monetary Fund (IMF) in its most recent Article IV consultation and the Bahamian Central Bank, which is predicting similar growth above two percent.
The US-based rating agency maintained The Bahamas’ present ‘B+’ long-term credit rating with a “stable” outlook. It also credited a “robust recovery” post-COVID and the government’s fiscal consolidation efforts, slashing the deficit and containing debt.
But Shadow Finance Minister J. Kwasi Thompson said the opposition is “very concerned” about the report, noting that S&P said it expects the Bahamian economy to slow to 1.8 percent in 2024, highlighting the country’s “below-average long-term growth performance compared with that of others at a similar level of development.”
Thompson said the agency presented a “somewhat bleak story of the economic trajectory of The Bahamas.”
However, Prime Minister Philip Davis said the debt burden’s containment and the government’s new energy reforms supported S&P’s decision “to affirm our country’s credit ratings and to designate the outlook as stable.
“The report comes three years into our term when we’re honoring the Bahamian people for how far we’ve come together while recognizing there is much work yet to be done. When we entered office, the country was in crisis.
“The mishandling of the pandemic meant our country’s health and economic outcomes lagged behind those of other nations in the region. Our national debt had increased by US$2.4 billion in just two years,” he added.
Davis said that everyone understood how grim and serious the situation was, and Bahamians feared a major increase in value-added tax (VAT) and even a currency devaluation. He said Bahamian businesses were suffering from misguided lockdowns and curfews, hospitals were in dire straits, and schools were closed and in disrepair.
But he said his administration has been able to turn around the situation, and there’s still much more work.
“A global inflation crisis has hit our Bahamian families hard. There aren’t any easy answers or quick fixes, so we’re taking on our country’s toughest problems,” Prime Minister Davis said, adding that “we’re implementing our country’s first nationwide energy reforms, upgrading our electricity grid and bringing solar power and natural gas to our islands.”
Davis said that the government understands that comprehensive, nationwide reform of this sector is the only way to reduce prices and make electricity more reliable, “both essential to helping Bahamian families and businesses and supporting the dynamic, inclusive economic growth we know our country is capable of.”
He said that the country is building and strengthening partnerships across the world, strengthening borders, and advocating for policies that help small island states like the Bahamas promote opportunities for Bahamians.
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