The International Monetary Fund’s Executive Board concluded the 2025 Article IV consultation with The Bahamas, endorsing the staff appraisal on a lapse-of-time basis. The assessment notes a solid post-pandemic recovery led by tourism and improving public finances, while highlighting the need for continued fiscal consolidation, ongoing electricity sector reform, and investment in climate resilience to reduce vulnerabilities and support sustained growth. Real GDP grew 3.4 percent in 2024 and is projected at around 2.8 percent in 2025 before moderating toward an estimated potential growth rate of 1.5 percent over the medium term; inflation has decelerated and was 1.3 percent in July 2025, while the unemployment rate stood at 9.3 percent in the second quarter of 2025. The fiscal deficit narrowed to 0.5 percent of GDP in FY2024/25 with a primary surplus, but central government debt remains elevated at around 74 percent of GDP; additional revenue and spending measures were flagged as necessary to achieve the authorities’ medium-term debt target of 50 percent of GDP, including options such as introducing corporate and personal income taxes, rationalising tax expenditures, raising the standard VAT rate, and reducing transfers to state-owned enterprises. Priorities also include strengthening fiscal reporting and the institutional framework for public-private partnerships, better assessing and mitigating SOE-related fiscal risks, supplementing civil service pension reform to address actuarial imbalances, advancing accrual-based budget accounting, and continuing efforts to reduce debt rollover risks; on the financial side, the appraisal calls for monitoring bank resilience as private credit rises, strengthening nonbank oversight, closing data gaps (including real estate price indices), progressing legal reforms for resolution frameworks and safety nets, reducing the ceiling on central bank advances to the government to support the exchange rate peg, and continuing implementation of the 2024 DARE Act alongside enhanced risk-based AML/CFT supervision. The authorities consented to publication of the Staff Report, which the IMF said would be published shortly on its Bahamas country page.
International Monetary Fund 2026-02-05
International Monetary Fund concludes 2025 Article IV consultation with The Bahamas and urges additional measures to reach 50 percent debt target
The IMF's Executive Board concluded the 2025 Article IV consultation with The Bahamas, noting a solid post-pandemic recovery driven by tourism and improved public finances. They emphasized the need for fiscal consolidation, electricity sector reform, and climate resilience investment. The assessment highlights GDP growth projections, fiscal deficit reduction, and necessary revenue and spending measures to achieve a medium-term debt target, alongside financial sector monitoring and legal reforms.