The Bahamas: 2025 Article IV Consultation-Press Release; and Staff Report

The 2025 Article IV Consultation discusses that The Bahamian economy has experienced a solid recovery in recent years, boosted by tourism, and steps have been taken to strengthen public finances. Growth is projected to moderate to 1 1/2 percent, in line with the economy’s estimated potential. Public debt is declining but remains elevated, underscoring the need for continued consolidation. Downside risks include a global slowdown that could reduce tourism receipts and the rising likelihood of extreme weather events. On the upside, ongoing public and private tourism‑related infrastructure projects are easing capacity constraints, which could lift both actual and potential growth over time. Policy discussions centered on reinforcing the authorities’ planned fiscal consolidation while addressing supply‑side bottlenecks. Achieving medium‑term fiscal objectives will require revenue‑enhancing tax measures and expenditure reprioritization, alongside careful assessment and mitigation of fiscal risks from public‑private partnerships and climate shocks. Financial sector reforms will support stability and deepen inclusion. In order to unlock higher potential growth, reforms should complement infrastructure investment with greater human capital development, reduced regulatory burdens on businesses, and strengthened resilience to extreme weather events.