Moody’s Ratings (Moody’s) upgraded its long-term issuer and senior unsecured ratings on The Bahamas to ‘Ba3’ from ‘B1’. The rating action reflects the sustained strengthening in fiscal performance and the improved government’s liquidity and funding profile supported by “lower net borrowing requirements, increased reliance on longer-term multilateral financing, and active liability management”.
Moody’s highlighted The Bahamas’ track record of fiscal consolidation, supported by robust tourism activity, tighter tax enforcement, and contained expenditure growth. The agency noted that “revenue performance has become more durable, extending beyond the cyclical support from tourism”. Looking ahead, Moody’s projects that “primary surpluses average approximately 4% of GDP between fiscal 2026 and fiscal 2028”, levels it characterizes as “among the strongest outcomes for similarly rated sovereigns.”
The agency also recognized meaningful progress on debt metrics, projecting that government debt will decline from 72.5% of GDP in FY2025 to approximately 68% by FY2027. Moody’s expects the energy sector reform to “reduce contingent liabilities from the state-owned enterprises, as the operational and financial burden on the government diminishes.”
Moody’s further noted a “meaningful improvement in the sovereign’s liquidity risk profile”, reflecting reduced net borrowing needs due to sustained primary surpluses and active liability management, alongside improved financing conditions as the domestic investor base stabilized and the “government’s financing strategy shifted toward longer-tenor, more concessional sources”.
Further upgrades in the short to medium term is possible should The Bahamas demonstrate “a sustained improvement in debt affordability”, “a faster-than-expected decline in government debt”, as well as greater “access to financing on concessional terms”.
Moody’s ratings upgrade reflects the strong momentum in The Bahamas’ credit trajectory, building upon S&P’s upgrade to ‘BB-‘ from ‘B+’ in September 2025 and Fitch’s ‘BB- / Stable’ inaugural credit rating affirmed in April 2026. It further demonstrates the authorities’ commitment to fiscal consolidation, and the continuous improvement in credit perception following the successful return to international capital markets in June 2025, despite global market volatility driven by geopolitical developments.