Economic Long-Term Ratings Raised To ‘BB-‘ From ‘B+’ By S&P Global

Advertisement

NASSAU, BAHAMAS – The Bahamian economy is gaining momentum. In its latest September report, global credit rating agency Standard & Poor’s (S&P) upgraded the country’s long-term foreign and local currency sovereign credit ratings from B+ to BB-, signaling improved economic performance and fiscal management.

S&P based its analysis on data from the Bahamas National Statistical Institute, which now offers wider geographic coverage. The agency highlighted two key drivers behind the upgrade: the strength of the tourism sector, particularly cruise tourism, and increased tax compliance, which has helped reduce the fiscal deficit and manage the national debt burden.

Economist Explains the Impact

Economist and former State Minister of Finance Zhivargo Laing says the improved rating reflects growing investor confidence.

“International credit rating agency Standard & Poor’s believes that the government’s long-term creditworthiness is better. That means people who invest in government bonds will now see less risk associated with purchasing those bonds, and the government is likely to pay less to borrow from those investors,” Laing explained.

A Stable Outlook Moving Forward

S&P also maintained a stable outlook, anticipating that the country’s GDP growth prospects will remain solid in the near term, with long-term growth expected to align with peer nations at a similar stage of development.

Laing noted that S&P is one of several respected long-term credit rating agencies, alongside Fitch and Moody’s, whose assessments are widely used by private and public investors.

“They’re fairly reliable. Many investors look to these agencies to conduct due diligence on the financial health of countries and companies. If investors had to do that work themselves, it would be very costly,” Laing said.

What Could Change the Rating

While the outlook is stable, the report is not set in stone. S&P’s rating can shift based on the government’s fiscal performance and economic conditions, either positively or negatively.

Laing emphasized the importance of continued fiscal discipline:

“If the government avoids a deficit, it won’t be pressed to look for additional revenue through taxation. That frees up resources that can be used for collective national benefits, like education and cultural development.”