Moody’s has upgraded The Bahamas’ credit rating from B1 to Ba3, while changing the country’s outlook from positive to stable, according to its latest report released yesterday.
The agency said the upgrade reflects continued improvements in fiscal performance, which have led to a reduction in government debt and a significant decline in liquidity risk.
Moody’s noted that the country’s economic fundamentals have strengthened considerably, along with improvements in institutional capacity and governance, while fiscal and financial conditions have shown clear progress.
The report highlights that the government has established a consistent track record of strong primary budget surpluses, supported by improved revenue collection, a broader tax base, and controlled public spending.
The agency projects that these trends will contribute to a gradual reduction in public debt to around 68 percent of GDP by 2027, with a further decline to just above 60 percent by the end of the decade.
In addition, debt affordability is expected to improve, with interest payments projected to fall to about 17 percent of government revenue in the coming years.
Moody’s also pointed to the positive impact of energy sector reforms, which are expected to reduce the burden of state-owned enterprises, as well as improvements in the country’s financing strategy and reduced refinancing risks.
The agency noted that revenue growth is becoming more sustainable, extending beyond seasonal tourism-driven gains, with revenues projected to reach around 22.5 percent of GDP in the 2026–2027 period.
Despite the positive trends, Moody’s cautioned that the economy remains heavily dependent on tourism and exposed to climate-related risks, which continue to pose structural challenges.
However, a stable political environment and consistent economic policymaking continue to support investor confidence and strengthen the country’s credit profile.
