The Tribune

By Neil Hartnell

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas’ national debt soared by almost $300m to hit $12.385bn at end-September 2025 in a signal that the Government likely incurred a significant deficit during the first quarter of its current fiscal year.

The Central Bank, in its quarterly review of the 2025 calendar third quarter, revealed that the direct debt accumulated by the central government increased by $300.3m or 2.6 percent during the period. On an annualised basis, meaning over the previous 12 months, it grew by $413.2m compared to end-September 2024.

“The direct charge on the Government increased for the quarter ended September 2025 by $300.3m and, on an annual basis, by $413.2m (3.5 percent) to $12.07bn. A breakdown by currency revealed that Bahamian dollar debt represented 54.3 percent of the total, while foreign currency liabilities accounted for the remaining 45.7 percent,” the Central Bank said.

“The Government’s contingent liabilities declined by $3.9m (1.2 percent) over the review quarter, and by $19.4m (5.8 percent) year-on-year to $315.9m. Consequently, the national debt, inclusive of contingent liabilities, increased by $296.5m (2.5 percent) over the three-month period, and by $393.8m (3.3 percent) on an annual basis to $12.385bn as at end-September 2025.

“As a ratio to gross domestic product (GDP), the direct charge decreased by an estimated 1.5 percentage points on a yearly basis to 73.4 percent at end-September. Further, the national debt-to-GDP ratio fell to an estimated 75.3 percent from 77 percent in the third quarter of 2024.”

Elsewhere, the Central Bank described the mortgage-funded domestic Bahamian housing market as “subdued”. It said: “In domestic financing developments, total mortgage disbursements for new constructions and repairs - as reported by banks, insurance companies and the Bahamas Mortgage Corporation - reduced by 38.6 percent ($19.4m) to $30.9m, a switch from a 98.7 percent expansion a year earlier.

“Contributing to this outturn, residential disbursements decreased by 26.3 percent ($8.5m) to $23.7m, a reversal from a 33.4 percent growth in the corresponding 2024 period. Likewise, commercial disbursements declined by 60.3 percent to $7.2m, a turnaround from a marked increase in the previous year.

“Compared to the same period in 2024, total mortgage commitments for new buildings and repairs - a forward-looking indicator of domestic activity - decreased by 32 to 82, with the corresponding value reducing by 43.8 percent to $29.6m,” the Central Bank continued. “Categorised by loan type, the number of undisbursed residential commitments fell to 33 from 80, with the associated value decreasing by 4 percent ($1.1m) to $25.9m.

“Conversely, the number of approvals for commercial commitments for new buildings and repairs increased to two from one, while the corresponding value reduced considerably to $3.5m from $25.7m the year prior.

“In terms of interest rates, the average financing costs for residential mortgages decreased by 40 basis point to 5.6 percent vis-à-vis the same quarter in the previous year. Likewise, the average interest costs for commercial disbursements narrowed by ten basis points to 6.4 percent.”