NASSAU, The Bahamas – S&P Global Ratings (S&P) upgraded its long-term foreign and local currency sovereign credit ratings on The Bahamas to ‘BB-’ from ‘B+’. The rating action reflects strengthened economic performance, supported by the tourism and financial sectors, coupled with sound fiscal management: “The stronger economy, propelled by strong cruise tourism and large-scale investment projects across the Family Islands, and the government’s tax compliance efforts have helped reduce the fiscal deficit and contained the sovereign’s debt burden.”
S&P highlighted several key drivers behind the upgrade: stronger economic performance, with GDP growth of 3.4% in 2024 and a projected 2.1% in 2025, supported by revised data collection methods from the Bahamas National Statistical Institute; record tourism, with 11.2 million arrivals in 2024 and 6.3 million in the first half of 2025; fiscal improvement, as the deficit narrowed to 1.3% of GDP in FY 2023/24, returning to pre-pandemic levels; a resilient policy framework underpinned by fiscal consolidation; ongoing energy reforms expected to strengthen the financial position of Bahamas Power and Light and other public entities; and continued investment.
Moreover, the agency recognized recent improvements in debt indicators, indicating that “refinancing risks have abated, given the government’s commitment to fiscal discipline,” and projecting that “debt is likely to fall to 66.3% of GDP by the end of 2025, from 77.8% in 2020.”
Looking ahead, S&P noted it expects that “GDP growth prospects will remain solid,” with long term growth aligning “with that of peers at the same level of development,” and that the government “will remain committed to prudent fiscal management and contain the debt burden.” Further ratings upgrades may materialize in the short to medium term “if The Bahamas continues to demonstrate solid growth and sustained near-balanced fiscal outcomes,” in line with objectives outlined in the 2025 Fiscal Strategy Report.
This ratings upgrade from S&P reflects the ongoing recovery of credit perception and marks a significant milestone in The Bahamas’ re-rating trajectory, building upon positive ratings actions from Moody’s (outlook revision to ‘Positive’ from ‘Stable’) and Fitch (‘BB-’ / ‘Stable’ inaugural credit rating), both of which were published in April, and the country’s successful return to international capital markets in June. It further demonstrates the authorities’ commitment to improved market disclosure and financial transparency.
