The Bahamas’ Rating Changes From Stable To Positive

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NASSAU, BAHAMAS – The latest economic outlook by Moody’s has upgraded The Bahamas’ credit profile from stable to positive, reflecting improvements in the country’s financial position.

Angelo Butler – Corporate Advisory Services Manager, CFAL
“It’s kind of like a ranking system, and in this case, it’s just telling investors that previously they believed The Bahamas’ outlook was stable, but now, given some of the recent changes and improvements in the financial position, the outlook is more positive.”

Despite the positive outlook, Moody’s has maintained the long-term issuer and senior unsecured ratings at B1.

Angelo Butler – Corporate Advisory Services Manager, CFAL
“It goes alphabetically, so the most highly rated countries, like the United States, would have ratings that begin with ‘A,’ then countries like The Bahamas would have ‘B,’ and then some countries with ‘C’ and ‘D.’ So it just tells you kind of where we fit within that spectrum.”

Moody’s expects a surplus increase to 4.5% of GDP in the next fiscal year, up from 3.2% of GDP this year, driven by higher revenue collection and disciplined expenditure. The report also notes that the primary balance shifted to a surplus of 2.9% of GDP last year, up from a deficit of 1.4% of GDP in 2022.

The Office of the Prime Minister touts the improved rating as evidence of the Davis Administration’s commitment to bouncing back from the COVID-19 pandemic.

Latrae Rahming – Communications Director, Office of the Prime Minister
“It’s a significant moment that signals to the global financial community that The Bahamas is back on solid footing, and it didn’t happen by chance.”

However, questions remain about the potential impact of looming global trade wars and what the outlook means for consumers.

Angelo Butler – Corporate Advisory Services Manager, CFAL
“If the tariffs continue exactly as they are, it would cause some sort of slowdown in the global economy. If the U.S. economy slows down, the expectation is that The Bahamas’ economy will slow down as well.”

Angelo Butler – Corporate Advisory Services Manager, CFAL
“If the government’s interest costs continue to go up, more of the government’s budget will go toward paying interest. So you would need more taxes to pay more interest. The better the government’s financial position becomes, the more able they are to do things like tax cuts or to give tax breaks and try to lower the cost of living.”