The Bahamas June 2024 Quarterly Fiscal Review

• The Bahamas’ national debt fell by more than $200Mn during the three months to the end of June 2024 as total repayments exceeded new borrowings by the Government. The Central Bank, unveiling its economic review for the second quarter of 2024, added that the country’s debt only increased by “a muted” $3.6Mn over the last 12 months to close the fiscal year at a total of $11.653Bn.
• The modest increase, combined with economic growth, also took The Bahamas’ debt-to-GDP ratio to a fraction below 80%. As a ratio to GDP, the direct charge decreased by an estimated 2.7 percentage points on a yearly basis to 77.6% at the end of June. In addition, the national debt-to-GDP ratio declined to an estimated 79.9% compared to 83% in the second quarter of 2023.
• In terms of overall fiscal operations, provisional data on the Government’s budgetary operations for the first ten months of FY2023/24 (July 1, 2023, to June 30, 2024) showed that the overall deficit declined by $68.8Mn (27.9%) to $177.9Mn, relative to the previous corresponding period in FY2022/23.
• The outturn reflects a $195.9Mn (8.3%) expansion in total revenue to $2,550.9Mn on account of higher value-added tax (VAT) collections and higher proceeds from stamp taxes on financial and realty transactions, which outpaced the $127.1Mn (4.9%) growth in aggregate expenditure to $2,728.8Mn.
• Going forward, the fiscal deficit is projected to fall to $69.8Mn for FY2024/25, relative to FY2023/24 budgeted $131.1Mn. This represented an estimated lower budgeted deficit to GDP ratio of 0.5% for FY2024/25 from the planned 0.9% of GDP for FY2023/24. Correspondingly, the National Debt to GDP ratio is forecasted to be lower at 75.3% for FY2024/25 from the budgeted 80.6% for FY2023/24.

(Sources: Central Bank of the Bahamas & The Tribune)