Durrant Pate/Senior journalist

The Bahamas is set to incur a significant deficit during the first quarter of its current fiscal year, having seen its national debt soar by US$300 million to hit US$12.385 billion at the end of September 2025. 

The Central Bank of the Bahamas, in its third quarterly review of 2025, revealed that the direct debt accumulated by the central government increased by US$300.3 million or 2.6 per cent during the period. On an annualised basis, the debt grew by US$413.2 million compared to end-September 2024. The direct charge on the government increased for the quarter ended September 2025 by US$300.3 million and on an annual basis went up by US$413.2 million (3.5 per cent) to US$12.07 billion. 

A breakdown by currency revealed that Bahamian dollar debt represented 54.3 per cent of the total while foreign currency liabilities accounted for the remaining 45.7 per cent, according to the Central Bank.

The Government’s contingent liabilities declined by US$3.9 million (1.2 per cent) over the review quarter and by US$19.4 million (5.8 per cent) year-on-year to US$315.9 million. Consequently, the national debt, inclusive of contingent liabilities, increased by US$296.5 million (2.5 per cent) over the three-month period and by US$393.8 million (3.3 per cent) on an annual basis to US12.385 billion as at the end of September 2025. 

As a ratio to gross domestic product (GDP), the direct charge decreased by an estimated 1.5 percentage points on a yearly basis to 73.4 per cent at the end of September. Further, the national debt-to-GDP ratio fell to an estimated 75.3 per cent from 77 per cent in the third quarter of 2024. Overall, after peaking in 2021, The Bahamas’ debt burden is set to slowly decline over the coming decade, on the back of improvements in its fiscal position. 

Total debt as a fraction of GDP is slated to decline from 81.5 per cent in 2023 to 54.4 per cent in 2032. The Bahamian government’s fiscal position is estimated to improve over the next 10 years, as a result of fiscal consolidation and increased value-added tax collections.

The fiscal deficit is expected to narrow from 1.6 per cent of GDP in FY2023/24 to 1.4 per cent in FY2033/34. Government revenues are anticipated to rise from 22.0 per cent of GDP in FY2023/24 to 22.9 per cent in FY2033/34. 

This will mainly reflect improving economic conditions and incomes, bolstering tax take. Expenditure growth will also remain moderate over the 10-year forecast period, as increasingly efficient state-owned enterprises (SOEs) require less government support.