NASSAU, The Bahamas – During his presentation of the Budget Communication for the Fiscal Year 2026-2027, on May 27, 2026, Minister of Finance the Hon. Michael Halkitis stated that the theme, ‘A Budget that Builds on Progress,’ reflected “the road our country has travelled, the mandate renewed by the Bahamian people on May 12, 2026, and the work now before this Administration as we continue to strengthen the economy, manage the public finances with care, and invest in the talent and resolve of our people”.
“When this Government came to office in September 2021, The Bahamas faced one of the most difficult economic periods in its modern history,” Minister Halkitis pointed out, during his remarks in the House of Assembly. “The economy had been downgraded. Public finances were under severe strain. The country was still recovering from the combined effects of Hurricane Dorian and the COVID-19 pandemic. Businesses were trying to survive. Workers were searching for stability. Parents were doing their best to keep food on the table, pay bills, cover school expenses, and hold their families together.”
He added: “Behind every fiscal figure was a human story: a hotel worker waiting for tourism to return; a straw vendor watching for visitors to come back; a small business owner wondering whether the doors could stay open another month; a young person questioning whether the economy had space for their ambition; a pensioner trying to make a fixed income meet rising prices.
“That was the condition of the country we inherited.”
Minister Hakitis pointed out that, from the first day, his Government understood that recovery would require both compassion and credibility.
“It required support for families, along with control of expenditure,” he said. “It required investment in growth, along with a serious plan for revenue, debt, and reform.”
Minister Halkitis added: “It required a Government that could speak to the needs of the Bahamian people, while also restoring confidence among investors, development partners, international bondholders, and credit rating agencies.
“That is the balance we have sought to maintain.”
He noted that the story of his Government’s past term was the story of a country turning around.
Minister Halkitis said: “It is the story of an economy moving from crisis to recovery, and from recovery to growth. It is the story of workers returning to their jobs, businesses rebuilding confidence, visitors returning to our shores, investment activity expanding, and public finances being placed on a stronger path.”
He added: “It is also the story of families who carried the weight of that recovery in their everyday lives. They showed patience. They showed faith. They showed the strength for which Bahamians are known.”
Minister Halkitis said that progress came because the Bahamian people worked for it; and because the Government made responsible choices.
“Progress came because we reopened the economy with care, strengthened revenue performance, supported key sectors, improved public administration, and kept our focus on fiscal sustainability,” he said.
Minister Halkitis added: “The result is clear. The Bahamas has moved from downgrade to upgrade. It has moved from emergency recovery to renewed confidence. It has moved from deep uncertainty to a stronger economic foundation. On May 12, 2026, the Bahamian people elected this Administration to continue that progress. They gave this Government a renewed mandate to protect the gains already made, deepen the recovery, widen opportunity, and ensure that growth reaches more homes, more businesses, more communities, and more islands.
“This Budget answers that mandate.”
He stated that the Budget was being presented at a time when the global environment remained uncertain. Across the world, Minister Halkitis pointed out, governments were managing higher borrowing costs, geopolitical tensions, supply chain risks, energy volatility, climate events, food price pressures, and slower growth in major economies.
“As a small island developing state, The Bahamas feels these pressures quickly,” he said. “We import much of what we consume. We remain exposed to global fuel prices, tourism trends, international financial conditions, and the growing cost of climate resilience.”
Minister Halkitis added: “In this environment, the country needs steady leadership. It needs a credible fiscal plan. It needs policy consistency. It needs public investment that supports growth. It needs reforms that improve how government works. Above all, it needs confidence in the Bahamian people, their skills, their work ethic, their creativity, and their capacity to help build the next stage of national development”
He stated that that was because a country that managed its finances well was better able to support its people.
“A country that earns confidence is better able to attract investment,” Minister Halkitis said. “A country that protects its credit standing is better able to finance roads, airports, clinics, schools, energy reform, and national resilience at more manageable costs.”
He added: “The message of this Budget in the simplest of terms is: We will protect the recovery. We will build confidence. We will invest in people. We will support economic expansion. We will strengthen the fiscal position of the country. We will prepare The Bahamas for the risks and opportunities ahead.”
Minister Halkitis said that his Government’s policy framework remained anchored in four priorities: Security, Opportunity, Affordability, and Reform.
He stated: “Security means safer communities, stronger borders, better emergency response, and a country prepared to protect its people and its economy. Opportunity means pathways to jobs, training, entrepreneurship, education, investment, home ownership, and upward mobility across New Providence, Grand Bahama, and the Family Islands. Affordability means easing pressure on households where responsible and practical, especially in food, energy, healthcare, housing, and daily living costs. Reform means improving public administration, strengthening accountability, expanding transparency, and delivering better service to the Bahamian people.”
Those priorities, Minister Halkitis said, shaped the work of his Government’s past term.
He added: “We reduced the standard VAT rate from 12 percent to 10 percent. We reduced VAT on unprepared food sold in grocery and food stores. We reduced VAT on designated basic items, including select medical supplies and hygiene products. On April 1, 2026, VAT was removed from all unprepared and uncooked food items commonly purchased in grocery stores.”
Those measures, Minister Halkitis said, were designed to “bring relief to households while preserving the revenue framework needed to fund schools, hospitals, roads, security, social services, and the obligations of the state”.
He pointed out that his Government also invested directly in people.
“We introduced the national School Breakfast Programme because children learn better when they begin the day ready to learn. We expanded access to training through Upskill Bahamas and DigiLearn,” Minister Halkitis said. “We established the National Youth Guard Programme and the National Apprenticeship Programme to help young Bahamians connect training with service, work, and future opportunity.”
“We created the Catastrophic Care Fund to assist families facing severe medical hardship,” he added. “We established the Public Hospitals Authority Academy to train Bahamians for healthcare careers and strengthen our national capacity.”
Minister Halkitis pointed out that his Government advanced major energy reforms to improve reliability, reduce costs over time, and modernize the electricity sector. He added that the acquisition of the Grand Bahama Energy Company formed part of a wider national effort to place Grand Bahama within a stronger national energy framework.
Minister Halkitis said: “We invested in airports, roads, runways, and Family Island infrastructure because development must reach every island. We expanded free public Wi-Fi in parks and public spaces because connection now forms part of opportunity.”
“We established the Creative and Performing Arts School of The Bahamas because Bahamian talent deserves training, structure, and a pathway to the world,” he added. “We concluded more than 60 labour agreements in a single term, improving wages and working conditions for public officers across several sectors.”
Minister Halkitis also strengthened the systems that supported confidence in Government.
“The enhanced e-Procurement Portal has expanded access to government contracts and procurement opportunities through a single public platform,” he pointed out. “This reform supports accountability, wider participation, and greater confidence in the use of public funds.”
Through healthcare reform, including the National Health Insurance Act, 2025, and the planned integration of the National Prescription Drug Plan into the National Health Insurance Authority, his Government was working to improve access, efficiency, and service delivery,” Minister Halkitis added.
He continued: “Through the $300 million external debt refinancing initiative under The Bahamas Debt Conversion Project for Marine Conservation, this Government showed that sound debt management and environmental protection can move together in the national interest. Through legislative reform and stronger enforcement on economic substance requirements, The Bahamas was removed from the European Union blacklist in 2024, protecting the standing of our financial services sector.”
“Through major investment commitments, including Carnival Corporation’s Celebration Key development and Royal Caribbean’s Royal Beach Club project, The Bahamas continues to attract investment, create jobs, and expand economic activity,” Minister Halkitis added: “At the same time, this Government is strengthening foreign direct investment compliance so that commitments made to the Bahamian people are properly monitored and honoured.”
He stated that that was the record on which the Budget stood.
“A country downgraded in 2021 now stands with renewed confidence,” Minister Halkitis said. “An economy under pressure has returned to growth. A fiscal position under strain has been placed on a stronger path.
“A people tested by crisis have shown courage, patience, skill, and resolve,” he added. “A Government renewed by the Bahamian people on May 12 now returns to this Honourable House with a Budget designed to build on progress.”
Minister Halkitis stated that his Government was “clear-eyed about the road ahead”.
“The global environment remains uncertain,” he said. “Costs remain a concern for families. Climate risks continue to threaten small island states. The country must continue to manage debt carefully, strengthen revenue systems, improve public services, and invest wisely.”
Minister Halkitis added: “But The Bahamas now moves from a stronger foundation. This Budget protects that foundation and builds upon it. It is about making progress real in people’s lives. It is about making sure economic growth reaches families. It is about giving young Bahamians a fair chance. It is about helping communities feel the benefit of national development. It is about proving that fiscal responsibility and human progress can move together.”
“We will navigate these times together,” he continued. We will invest in the talent of our people.”
“We will draw on the resolve that has carried this country through every storm,” Minister Halkitis added. “We will continue building a Bahamas where progress is protected, opportunity is widened, confidence is strengthened, and every Bahamian can see themselves in the future that we are creating.”
