{
  "title": "IMF Executive Board Concludes 2025 Article IV Consultation with The Bahamas",
  "publication": "IMF News, February 5, 2026",
  "sourceUrl": "https://www.imf.org/en/news/articles/2026/02/04/pr-26031-the-bahamas-imf-executive-board-concludes-2025-article-iv-consultation",
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  "summary": "The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation with The Bahamas and considered and endorsed the staff appraisal without a meeting, on a lapse-of-time basis.",
  "publishDate": "2026-02-05",
  "sections": [
    {
      "heading": "Overview",
      "content": "- The Executive Board completed the 2025 Article IV consultation with The Bahamas and endorsed the staff appraisal without a meeting, on a lapse-of-time basis.\n- The authorities consented to publication of the Staff Report prepared for this consultation.\n- Date of press release: February 5, 2026. Press Release No. 26/031."
    },
    {
      "heading": "Recent Economic Performance",
      "content": "- Real GDP expanded by 3.4 percent in 2024.\n- Growth remained resilient in the first half of 2025, supported by construction and cruise tourism.\n- Unemployment rate: 9.3 percent in the second quarter of 2025.\n- Inflation decelerated to 1.3 percent in July 2025, partly reflecting lower global energy prices.\n- Fiscal outcomes in FY2024/25: primary balance remained in surplus and the fiscal deficit narrowed to 0.5 percent of GDP.\n- Central government debt remains elevated, at around 74 percent of GDP."
    },
    {
      "heading": "Outlook and Risks",
      "content": "- Growth projections:\n  - Growth is expected to be around 2.8 percent in 2025.\n  - Growth is expected to gradually slow toward 1½ percent (the assessed potential growth rate) over the medium term.\n- Inflation and external sector:\n  - Headline inflation is projected to settle at around 2 percent.\n  - The current account deficit is projected to narrow to about 6 percent of GDP over the medium term.\n- Risks to the outlook:\n  - Downside: potential global slowdown affecting tourism; natural disasters.\n  - Upside: greater-than-expected effects of public and private infrastructure projects linked to tourism and the energy sector reform."
    },
    {
      "heading": "Executive Board Assessment — Key Messages",
      "content": "- Strengths and priorities:\n  - Robust post-pandemic tourism has driven growth and fiscal revenues.\n  - Actions taken to improve public finances and enhance disaster risk management.\n  - Ongoing electricity sector reform, increased tourism capacity, and investment in climate resilience are critical to reduce fiscal vulnerabilities and foster sustained growth.\n- Growth path and risks:\n  - Growth in 2025 supported by construction and cruise tourism; expected to converge to 1½ percent over the medium term.\n  - Risks broadly balanced: downside (global slowdown, natural disasters); upside (infrastructure and electricity reform benefits).\n- Fiscal policy and debt target:\n  - Achieving the authorities’ medium-term target for central government debt (50 percent of GDP) requires additional measures.\n  - Recommended measures include introducing corporate and personal income taxes, rationalizing tax expenditures, raising the standard VAT rate, and reducing transfers to SOEs.\n  - Prioritize revenue-enhancing and expenditure-optimizing measures to create space for priority investments, such as education and resilient infrastructure.\n- Fiscal institutions and fiscal risks:\n  - Immediate priority: improve fiscal reporting and enhance institutional framework for PPPs.\n  - Accurately assess and mitigate fiscal risks arising from SOEs.\n  - Supplement planned civil service pension reform with more holistic changes to address actuarial imbalances.\n  - Advance adoption of an accrual-based accounting system for the budget to improve fiscal transparency.\n  - Continue efforts to reduce debt rollover risks.\n- Financial sector:\n  - Systemic financial stability risks are moderate.\n  - As bank credit to the private sector increases, safeguard banks’ resilience and monitor banks’ exposure to the sovereign.\n  - Strengthen oversight of nonbanks and close data gaps; operationalize real estate price indices.\n  - Planned legal reforms to improve resolution frameworks and safety nets; reduce the ceiling on central bank advances to the government to support the exchange rate peg.\n  - Maintain efforts to implement the 2024 DARE Act; enhance risk-based AML/CFT supervision and promote financial inclusion.\n- Structural and resilience policies:\n  - Raise productivity and implement fiscal consolidation to narrow external imbalances.\n  - Ongoing hotel and airport infrastructure projects can alleviate tourism capacity constraints.\n  - Reduce vulnerable employment and informality by cutting red tape, strengthening education, and expanding training and upskilling.\n  - Trade diversification and greater product market competition can strengthen resilience and reduce import costs.\n  - Continue energy sector reform to improve cost and reliability of electricity.\n  - Enhance disaster risk management and invest in climate resilience.\n  - Address housing affordability by investing in social housing and refining rental market regulations."
    },
    {
      "heading": "Fiscal and Macro-Financial Recommendations (Selected)",
      "content": "- Introduce corporate and personal income taxes.\n- Rationalize tax expenditures.\n- Raise the standard VAT rate.\n- Reduce transfers to state-owned enterprises (SOEs).\n- Improve fiscal reporting and PPP institutional framework.\n- Assess and mitigate SOE-related fiscal risks.\n- Supplement civil service pension reform with broader actuarial solutions.\n- Adopt accrual-based budget accounting.\n- Reduce debt rollover risks.\n- Strengthen oversight of nonbanks and close financial data gaps.\n- Implement planned legal reforms for resolution frameworks and safety nets.\n- Reduce the ceiling on central bank advances to government; implement the 2024 DARE Act.\n- Enhance risk-based AML/CFT supervision and promote financial inclusion.\n- Invest in education, resilient infrastructure, social housing, and training/upskilling."
    },
    {
      "heading": "Key Indicators (Selected from Table 1)",
      "content": "- Real GDP (annual % change): 2023: 3.0; 2024: 3.4; 2025: 2.8; 2026: 2.2; 2027: 1.9; 2028: 1.8; 2029: 1.6; 2030: 1.5.\n- Unemployment rate (%): 2023: 10.2; 2024: 8.4; 2025: 9.5; 2026: 9.4; 2027: 9.2; 2028: 9.0.\n- Current account balance (% of GDP): 2023: -7.0; 2024: -7.6; 2025: -7.8; 2026: -7.5; 2027: -7.3; 2028: -6.8; 2029: -6.5; 2030: -6.1.\n- CPI inflation (%, period average): 2023: 3.1; 2024: 0.4; 2025: 0.6; 2026: 1.2; 2027: 2.0.\n- CPI inflation (%, end of period): 2023: 0.0; 2024: 0.7.\n- Fiscal overall balance (% of GDP) 1/: 2023: -3.7; 2024: -1.2; 2025: -0.5; 2026: -0.4; 2027: -0.3; 2028: 0.1; 2029: 0.2.\n- Fiscal primary balance (% of GDP) 1/: 2023: 0.3; 2024: 2.7; 2025: 3.7; 2026: 3.6; 2027: 3.8.\n- Central government debt (% of GDP) 1/: 2023: 78.3; 2024: 73.8; 2025: 74.1; 2026: 72.7; 2027: 71.4; 2028: 69.9; 2029: 67.9; 2030: 65.8.\n- Note: 1/ Fiscal year (FY, July 1 - June 30).\n\nPress Release No. 26/031, IMF, February 5, 2026.\n\n---\n\n\n References\n\n- The Bahamas and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- www.imf.org/Bahamas\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2026/02/04/pr-26031-the-bahamas-imf-executive-board-concludes-2025-article-iv-consultation"
    }
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    "Published: February 5, 2026",
    "The Executive Board completed the 2025 Article IV consultation with The Bahamas and endorsed the staff appraisal without a meeting, on a lapse-of-time basis.",
    "The authorities consented to publication of the Staff Report prepared for this consultation.",
    "Date of press release: February 5, 2026. Press Release No. 26/031.",
    "Real GDP expanded by 3.4 percent in 2024.",
    "Growth remained resilient in the first half of 2025, supported by construction and cruise tourism.",
    "Unemployment rate: 9.3 percent in the second quarter of 2025.",
    "Inflation decelerated to 1.3 percent in July 2025, partly reflecting lower global energy prices.",
    "Fiscal outcomes in FY2024/25: primary balance remained in surplus and the fiscal deficit narrowed to 0.5 percent of GDP.",
    "Central government debt remains elevated, at around 74 percent of GDP.",
    "Growth projections:",
    "Inflation and external sector:",
    "Risks to the outlook:",
    "Strengths and priorities:",
    "Growth path and risks:",
    "Fiscal policy and debt target:",
    "Fiscal institutions and fiscal risks:",
    "Financial sector:",
    "Structural and resilience policies:",
    "Introduce corporate and personal income taxes.",
    "Rationalize tax expenditures.",
    "Raise the standard VAT rate.",
    "Reduce transfers to state-owned enterprises (SOEs).",
    "Improve fiscal reporting and PPP institutional framework.",
    "Assess and mitigate SOE-related fiscal risks.",
    "Supplement civil service pension reform with broader actuarial solutions.",
    "Adopt accrual-based budget accounting.",
    "Reduce debt rollover risks.",
    "Strengthen oversight of nonbanks and close financial data gaps.",
    "Implement planned legal reforms for resolution frameworks and safety nets.",
    "Reduce the ceiling on central bank advances to government; implement the 2024 DARE Act.",
    "Enhance risk-based AML/CFT supervision and promote financial inclusion.",
    "Invest in education, resilient infrastructure, social housing, and training/upskilling.",
    "Real GDP (annual % change): 2023: 3.0; 2024: 3.4; 2025: 2.8; 2026: 2.2; 2027: 1.9; 2028: 1.8; 2029: 1.6; 2030: 1.5.",
    "Unemployment rate (%): 2023: 10.2; 2024: 8.4; 2025: 9.5; 2026: 9.4; 2027: 9.2; 2028: 9.0.",
    "Current account balance (% of GDP): 2023: -7.0; 2024: -7.6; 2025: -7.8; 2026: -7.5; 2027: -7.3; 2028: -6.8; 2029: -6.5; 2030: -6.1.",
    "CPI inflation (%, period average): 2023: 3.1; 2024: 0.4; 2025: 0.6; 2026: 1.2; 2027: 2.0.",
    "CPI inflation (%, end of period): 2023: 0.0; 2024: 0.7.",
    "Fiscal overall balance (% of GDP) 1/: 2023: -3.7; 2024: -1.2; 2025: -0.5; 2026: -0.4; 2027: -0.3; 2028: 0.1; 2029: 0.2.",
    "Fiscal primary balance (% of GDP) 1/: 2023: 0.3; 2024: 2.7; 2025: 3.7; 2026: 3.6; 2027: 3.8.",
    "Central government debt (% of GDP) 1/: 2023: 78.3; 2024: 73.8; 2025: 74.1; 2026: 72.7; 2027: 71.4; 2028: 69.9; 2029: 67.9; 2030: 65.8.",
    "Note: 1/ Fiscal year (FY, July 1 - June 30).",
    "[The Bahamas and the IMF](http://www.imf.org/external/country/BHS/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[www.imf.org/Bahamas](http://www.imf.org/Bahamas)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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