NASSAU, BAHAMAS — Moody’s has upgraded The Bahamas’ sovereign credit rating to Ba3 from B1, a move a top banker cautioned should not be overstated, describing it as “par for the course” and “should have been expected,” while noting it brings the country closer to, but still short of, investment grade.
Moody’s said the upgrade reflects sustained improvements in fiscal performance, stronger liquidity conditions, and a more stable funding profile for the Government of The Bahamas. The agency cited lower net borrowing requirements, increased reliance on longer-term multilateral financing, and active liability management as key factors supporting the revision.
Moody’s also pointed to a strengthening fiscal position, supported by robust tourism activity, tighter tax enforcement, and contained expenditure growth. It said revenue performance has become more durable, extending beyond cyclical tourism gains.
Looking ahead, Moody’s projects primary surpluses averaging around 4% of GDP between fiscal 2026 and 2028, describing the level as among the strongest for similarly rated sovereigns. It also expects government debt to decline from 72.5 percent of GDP in FY2025 to about 68 percent by FY2027, supported by sustained fiscal consolidation and improved financing conditions.
The agency further noted that energy sector reforms are expected to reduce contingent liabilities from state-owned enterprises, easing long-term pressure on public finances. It also highlighted a “meaningful improvement” in liquidity risk, driven by reduced financing needs and a shift toward longer-tenor, more concessional borrowing.
The upgrade follows earlier positive actions from Standard & Poor’s and Fitch Ratings, both of which had already signaled improving credit conditions for The Bahamas.
However, a top banker urged caution in how the development is interpreted.
“I don’t think this is something that needs celebration. I think that there will be a tendency to do so because of the season that we’re in,” said Gowon Bowe, chief executive of Fidelity Bank (Bahamas).
“But the reality is that Moody’s is the last rating agency to actually conduct their rating review in the past 12 months. Fitch has reaffirmed their credit rating. S&P did a one-notch upgrade. And Moody’s always had a positive outlook, which meant that they saw positive signs.”
“So this really is something that I would say should be characterized as par for the course, meaning that this should have been expected. And this is nothing that’s worthy of celebration. It is, like I say, affirmation that all of the rating agencies are aligned.”
While acknowledging that the upgrade moves The Bahamas closer to investment-grade status, he stressed that it does not change the broader fiscal realities or remove the need for continued reform.
“I think most important is reading the full statement. There are some factors that are very important to our continued credit rating,” he said.
Bowe also raised concerns about transparency and public disclosure, warning that investor confidence depends on clear and consistent reporting rather than selective communication.
“I don’t think that there’s been any objective information released. Everything has been sensationalism or public relations. And I think the government, particularly the Ministry of Finance, needs to take very careful notice of that,” he said.
He added that rating agencies ultimately focus on verified fiscal data and continuity in governance, especially during election periods.
“We have to demonstrate that governments are continuous,” he said. “The technocrats in the Ministry of Finance, as well as the ministers responsible, are working right up until the day of election.”
Bowe also pointed to gaps in recent fiscal reporting, noting that the most recent detailed financial data released publicly reflects January figures, with subsequent updates still outstanding.
“The latest financial information that has been published by the Ministry of Finance is actually the January financials. February should be available,” he said.
He further referenced ongoing concerns around major national infrastructure developments, including Bahamas Grid, saying that public communication around such projects must be clearer and more transparent.
He said disclosures surrounding Bahamas Grid and similar initiatives have lacked sufficient objective detail, adding that stakeholders need more than public relations narratives to properly assess fiscal impact and risk exposure.
Looking ahead, Bowe emphasized that sustained credit improvement will depend on continued tax reform, stronger reporting systems, and the successful implementation of the domestic minimum tax framework.
“Companies are not going to cut a cheque if there is not very clear infrastructure, reporting framework, and response framework that says when I submit these taxes, I have very clear evidence that I’ve done so,” he said.
