The Bahamian National Debt Breaks $10Bn

• The Government has confirmed that The Bahamas’ national debt has breached the $10Bn mark due to the borrowing blow-out inflicted by the combination of COVID-19 and Hurricane Dorian.
• The Ministry of Finance, in its 2020-2021 full-year and fourth quarter “fiscal snapshot”, revealed Central Bank of The Bahamas data showing that the combination of the Government’s $9.909Bn direct debt - together with loans it has guaranteed on behalf of various state-owned enterprises (SOEs)- had taken the national debt to $10.356Bn at end-June 2021.
• It also confirmed the substantial increase in The Bahamas’ debt-to-GDP ratio, which rose from 66% of the latter at end-June 2020 to 86.3% some 12 months later. This resulted from the collapse in revenues due to the COVID-related contraction in economic activity as well as increased spending on business and social support measures to prevent families and wider society from imploding.
• While the Government had little choice but to respond to COVID and its devastating fall-out in the way that it did, and save the businesses and households that it could, the latest “snapshot” - issued just ten days before the upcoming general election - shows the scale of the economic and fiscal crisis confronting the next administration.
• Higher debt will likely result in greater future taxes, and the implementation of fiscal consolidation measures to achieve debt reduction and improve fiscal balances. It could also result in higher borrowing costs for the government.

(Source: The Tribune & NCBCM Research)