The Bahamas’ National Debt Surges by More Than $1Bn

  • The Bahamas’ national debt increased by $1.071Bn, or 8.8%, year-over-year to $13.17Bn at the end of June 2026, according to the Central Bank of The Bahamas’ Q2 2026 Economic Review. The increase reflected nearly $700Mn in additional direct government debt and a $373.5Mn rise in contingent liabilities.
  • The Government’s direct debt stood at $12.47Bn, up $697Mn, or 5.9%, year-over-year, despite declining slightly during Q2. Meanwhile, contingent liabilities increased to $703.4Mn, partly reflecting government-guaranteed borrowing related to the Grand Bahama Power Company acquisition, LNG energy reforms and the Public Hospitals Authority.
  • As a share of GDP, direct government debt declined by 0.2 percentage points year-over-year to 70.7% at end-June. However, the national debt-to-GDP ratio increased to 74.7% from 72.8% in Q2 2025, while total public sector debt rose to 77.3% of GDP.
  • The increase in debt comes despite a comparatively smaller $121.2Mn fiscal deficit at end-April 2026 and the Government's projection, as late as end-June, of a $32.7Mn Budget surplus for FY2025/26. The divergence has raised questions over the relationship between reported fiscal balances and the increase in government borrowing.
  • The Fiscal Responsibility Council also raised concerns about deviations from the Government’s FY2025/26 Annual Borrowing Plan and the transparency of its financing disclosures. Notably, Central Bank advances increased by $290.3Mn during the nine months to end-March 2026, despite this source of financing not being included in the borrowing plan. The Council called for explanations where material deviations occur and greater consistency in reporting actual financing against planned borrowing.
  • The increase in the debt-to-GDP ratio despite a decline in the direct government debt ratio highlights the growing impact of contingent liabilities on the wider public debt position. With government guarantees linked partly to energy and public-sector initiatives, the extent to which these obligations ultimately require government support will remain important for The Bahamas’ fiscal and debt trajectory.

(Source: The Tribune)