While speaking on the topic of the Current State of the Economy and Public Finances, during his Contribution on the 2026/2027 Budget Debate, on June 17, 2026, Prime Minister the Hon. Philip Davis stated that his Government’s first term focused on “Rescue and Recovery”.
“Our economy has now climbed from crisis, to recovery, to growth; and the numbers tell that story powerfully,” Prime Minister Davis said in the House of Assembly. “In a world disrupted by higher borrowing costs, conflict, and volatile energy prices, The Bahamas has not stood still.”
He added: “Our economy grew by an estimated 3.8 percent in 2025, on the heels of 4.2 percent the year before. For five consecutive years, we have grown beyond the old ceiling the doubters swore we could never break. And the income earned by the average Bahamian has pulled ahead of our regional peers — Barbados, Jamaica, Trinidad and Tobago — with the gap widening in our favour.”
Prime Minister Davis stated that nowhere was that turnaround clearer than in tourism.
“In 2021, arrivals limped in at just over two million — a shadow of our former strength, and the Bahamians who depend on this industry were hurting,” he said. “So we made our first priority plain: reopen our doors, and restore the activity that puts food on Bahamian tables.”
Prime Minister Davis added: “And look at what followed. Arrivals surged to 12.5 million by 2025, a gain of 11.4 percent in a single year. By March of 2026, we had already welcomed 3.9 million visitors, up 17.5 percent. And Grand Bahama — an island some had quietly written off — recorded extraordinary gains.”
He pointed out that that strength did not rest on a single pillar.
“It showed up across the board: in construction, in financial services, in a sharp rebound in utilities, and in real estate activity – which went up nearly 20 percent,” Prime Minister Davis said.
“We held inflation to just 0.6 percent while much of the world wrestled with rising prices,” he added. “And we drove unemployment down from a staggering 17.4 percent in 2021, to approximately 9.3 percent by the middle of 2025, with more Bahamians returning to work every single year.
“The more diverse our growth, the more shock-proof our economy becomes.”
He stated that confidence was returning.
“You can see it in where the money is flowing,” Prime Minister Davis said.
He added: “Foreign direct investment is moving across our archipelago – like in Abaco, Eleuthera, Grand Bahama, Inagua, and Long Island – fueling tourism, infrastructure, and construction, and creating jobs island by island. Our external reserves remain strong, private credit is rising, and bad loans are falling. These are the signs not of an economy that merely looks better, but of one that is fundamentally stronger.”
Turning his attention to the public finances, Prime Minister Davis noted that, when Hurricane Dorian and COVID-19 struck, The Bahamas faced “one of the worst fiscal crises in its history”, with the deficit exceeding $1 billion, and the national debt climbing to more than 100 percent of GDP.
“That was the inheritance handed to this Government,” he said. “And here is the turnaround.”
Prime Minister Davis added: “Revenue has grown from under $2 billion to a projected $4.4 billion this year. Spending has been reduced from crisis-era levels to about 21 percent of GDP. The deficit has been brought down year after year, resulting in a projected fiscal surplus of $223 million this year and a primary surplus of more than five percent of GDP.
“Most importantly, the debt burden has been driven down from more than 100 percent of GDP to 64.6 percent this year, with a clear path toward 52 percent by the Financial Year 2028/29.”
He pointed out that the cost of carrying that debt was easing too, with interest payments falling back toward three percent of GDP.
“From a $1.3 billion deficit to surplus, from deterioration to discipline – that is the distance this country has travelled,” Prime Minister Davis said.
He also pointed out that the world had taken notice of that progress.
“We returned to the international capital markets with an 11-year, US$1.067 billion bond,” Prime Minister Davis said. “It was almost four times oversubscribed, drawing more than 60 investors from across three continents.”
He added: “The proceeds were used to retire US$767 million in older, costlier debt and ease the pressure on our finances. We pioneered a debt conversion instrument that funds marine conservation while lowering our interest costs.
“This was the largest such initiative in our history.”
Prime Minister Davis said to also consider the “remarkable” turnaround of the Bank of The Bahamas, that he termed “a national institution reborn”.
“Its total assets have grown from $903.0 million in 2021, to over $1 billion in 2025,” he noted. “Net income leapt from $3.7 million to $30.6 million.”
“Return on equity climbed from 2.4 percent to a whopping 13.4 percent; and its efficiency ratio sharpened from 80.7 percent to 59.6 percent,” Prime Minister Davis added.
He pointed out that the market had “rendered its verdict”, noting The Bank’s share price had risen from $1.44 in 2021 to today’s price of $8.45. Prime Minister Davis also thanked and congratulated Chairman Donna Harding-Lee, Board Members, Management and Staff for their “sterling efforts over the past five years”.
“Bank of The Bahamas is now a stronger, more profitable institution, one that supports home ownership, expands access to credit, and serves Bahamians across our archipelago,” he stated.
Prime Minister Davis added: “It remains this Government’s policy that the Bank remain majority Government-owned; but we also believe Bahamians should share in its success. Subject to market conditions and the necessary approvals, the Government intends, over the next five-year period, to gradually divest some 20 to 25 percent of its shareholding to Bahamian investors.
“This will allow more of our people to own a piece of a revitalised national institution.”
He stated that, above all, every one of the three major credit rating agencies – S&P, Moody’s, and Fitch – had upgraded or affirmed The Bahamas, recognising what the Bahamian people had achieved.
“This is the journey of our country in just five years – from downgrade to upgrade,” Prime Minister Davis said.
He pointed out that his Government didn’t achieve those successes “on the backs of the Bahamian people”.
“We cut the standard rate of VAT from 12 percent to 10 percent,” Prime Minister Davis said. “We lifted it entirely off the unprepared food families carry home from the grocery store every day — relief they can feel every week at the cash register. We have proven that a government can be compassionate to its people and credible to the world at the very same time.”
He added: “We are not saying every challenge has vanished. We are saying the country is stronger and that the fundamentals are sound. We are saying growth is being sustained. And we are saying that with discipline, investment, and continued reform – and with our eyes fixed firmly on an investment-grade rating – the future of the Bahamian economy is bright.
“That is what progress looks like. And we have only just begun.”
