NASSAU, BAHAMAS- Senator Michael Halkitis, Minister of Economic Affairs, addressed questions on public debt, government spending, unemployment, and dormant accounts while speaking at the Bahamas Institute of Chartered Accountants (BICA) Annual Accountants Week.
Speaking on public debt, Halkitis said the nation’s current debt-to-GDP ratio stands at approximately 73 percent. The government aims to reduce this ratio to 50 percent by 2030–2031. “Following the 2008 financial crisis, deficits increased significantly, which is why careful revenue administration and cost management are so important. Our goal is to reduce debt while maintaining sustainable economic growth,” he said.
Halkitis highlighted refinancing opportunities amid favorable market conditions, noting that lower interest rates on sovereign debt could allow the government to refinance existing high-cost debt. “We are exploring ways to refinance debt issued at higher rates to save money and smooth out maturities. Regional initiatives, such as debt-for-climate and debt-for-social programs, could redirect resources toward education, housing, and security,” he added.
On government expenditure, Halkitis noted that while spending has increased, revenue is rising faster, with tax receipts up 11 percent and overall expenditure up 6 percent. He emphasized that controlled increases are necessary to support public services and stimulate economic activity.
Addressing unemployment, Halkitis said the recent increase to 10.7 percent in January 2025, up from 8.7 percent in October 2024, reflects higher labor participation, timing effects, and a mismatch between workforce skills and employer needs. “More people are entering the labor market, and there is a gap between the skills employers need and what is available. We are addressing this through vocational training and upskilling programs,” he said.
The Minister also clarified questions about dormant accounts, explaining that the Central Bank of The Bahamas manages all dormant account portfolios through a dedicated committee. Accounts must remain inactive for seven yearsbefore transfer to the Central Bank, with amounts over $500 held an additional ten years. Halkitis emphasized that safeguards are in place to ensure account holders can reclaim their funds, noting that 63 percent of dormant account assets belong to foreign account holders.
