NASSAU, BAHAMAS — The Government of The Bahamas acknowledges the recent review of the Fiscal Strategy Report and Annual Budget by the Fiscal Responsibility Council. We welcome the Council’s role in strengthening transparency and accountability within our fiscal framework, and we take note of the observations offered.
The Government remains confident in the overall direction of its fiscal and economic strategy. We have charted a clear path to reduce the debt-to-GDP ratio to 50 percent by FY 2030/31, while continuing to support growth, job creation, and targeted social investment. The Council itself has confirmed that The Bahamas is broadly compliant with the Public Financial Management Act, 2023, and that our debt trajectory is on a downward course.
The Government is unapologetic in its commitment to ensuring that fiscal policy is not pursued as an end in itself but as a means to improve the daily lives of Bahamians. Decisions such as adjusting the VAT rate on essential items are designed to ease cost-of-living pressures on families at a time when inflation and global shocks remain very real concerns. These measures reflect a deliberate choice to protect the most vulnerable, while at the same time pursuing reforms to broaden the tax base through initiatives such as the Domestic Minimum Top-Up Tax, enhanced compliance enforcement, and the digitalisation of the tax system.
We are also pressing ahead with structural reforms that will yield long-term savings and resilience. Pension reform for new public sector entrants will contain future liabilities, rationalisation of state-owned enterprises will reduce fiscal transfers, and reforms in energy and digital infrastructure will support both competitiveness and fiscal sustainability. At the same time, annual contributions to the sinking fund, prudent borrowing strategies, and expanded access to concessional financing demonstrate that debt management remains a top priority.
The Government recognises that the Council has raised questions about revenue targets, expenditure ceilings, and the treatment of capital spending. Our approach is guided by realism and prudence. The decision to allow SOEs to undertake critical capital investments is not an attempt to obscure expenditure but to accelerate national development through entities best positioned to deliver sector-specific projects. The Government will continue to improve reporting on these initiatives to ensure clarity and transparency.
We also wish to underscore that the report of the Council represents a roadmap for reform. While this initial review affirms that the Government has scored very well, we acknowledge that there is still room for improvement. Continuous learning, better reporting, and stronger execution are part of our commitment to building credibility and trust in fiscal management.
Equally important is the independence of the Council itself. The work of this Council has been decisive in enhancing fiscal accountability. Unlike the previous Council appointed by the former administration, which never produced a single report, this Government has ensured that the Council has the support and autonomy necessary to carry out its mandate. We are determined that independent oversight of the nation’s fiscal operations will remain a cornerstone of responsible governance.
This administration will not be distracted from the work of fiscal consolidation and growth. The Council’s review underscores that The Bahamas is moving in the right direction. Our economy has demonstrated resilience in the face of hurricanes, global pandemics, and external shocks. We will stay the course, tightening expenditure where necessary, strengthening revenue collection, investing in people, and building buffers against risk.
The Government of The Bahamas is resolute. Our fiscal strategy is balanced, sustainable, and firmly focused on securing a stronger, more resilient future for our nation and our people.
