The Surplus and the Quarter

The Bahamas Ministry of Finance published its nine month report on budgetary performance on 30 July, and the arithmetic in it rewards a slow reading. The budget for the financial year running from July 2025 to June 2026 set out to deliver an overall surplus of B$75.5 million. The Bahamian dollar has been fixed at one to one with the US dollar since 1973, so that is US$75.5 million on the same measure. Nine months in, at the end of March, the government was carrying an overall deficit of B$157.3 million. The same nine months a year earlier had produced a deficit of B$130.1 million, so the position had not narrowed. It had widened by B$27.3 million. With three quarters of the year gone, revenue stood at 65.5 per cent of its annual target and expenditure at 70.9 per cent of its own. The report describes the period as sustaining progress on fiscal consolidation. Both of those readings sit in the same document, and only one of them is arithmetic.

What the report does not spell out is what its own table leaves for the final quarter. To reach the budgeted surplus, April to June 2026 had to bring in revenue of B$1,344.4 million and hold spending to B$1,111.6 million, producing a quarterly surplus of B$232.8 million. Set that beside the same quarter a year before. Between April and June 2025 the government collected B$925.7 million and ran a surplus of B$51.2 million, a figure that falls out of subtracting the nine month outturn from the twelve month report for FY2024/25. So the budget asked its closing quarter to raise 45.2 per cent more revenue than the year before, and to deliver a surplus four and a half times as large. Revenue across the preceding nine months grew by 3.3 per cent. The budget as a whole assumed revenue would grow 14.7 per cent on the previous year’s outturn. A plan can survive a gap between two such rates for a quarter or two. It cannot survive one that runs the length of the year.

The shortfall is not a story about visitors staying away. The two calendars do not line up, and the difference is worth stating rather than gliding over. The fiscal nine months run from July 2025 to March 2026. The Central Bank reports arrivals for the calendar year to May 2026, and over that period the total rose 14.2 per cent. The composition is where the money goes. Sea arrivals rose 15.9 per cent while air arrivals rose 4.8 per cent, and a cruise passenger and a stopover visitor are not the same taxpayer. The stopover fills a room, pays value added tax on that room and on most of what is bought around it, and lands in the tax base. The cruise passenger largely does not. The revenue lines are consistent with that split. Across the fiscal nine months, value added tax collections rose 6.6 per cent, while taxes on property fell by B$12.8 million, stamp taxes by B$12.5 million and taxes on international trade transactions by B$7.3 million. A headline arrivals count growing 14.2 per cent sits beside revenue growing 3.3 per cent. An arrivals figure counts people through a port. A budget is built on what those people spend once they are through it.

The balance sheet, meanwhile, moved the right way. The Direct Charge, which the Ministry defines as the direct claim on central government by holders of the public debt, rose by B$754.5 million over the nine months to B$12,473.2 million. As a share of the economy it still fell, to 71.5 per cent of GDP from 71.8 per cent a year earlier. The measure matters. The Direct Charge excludes the guaranteed debt of public corporations, so it sits below any public sector figure and is not the basis this column’s Debt Tracker uses. External reserves closed June at B$3,295.4 million, around US$3.3 billion, up B$481.0 million across the calendar year to date. None of that is in question and the peg is not under pressure. But a ratio that falls because nominal output is growing is not a deficit that is closing, and this deficit widened. The twelve month report is still listed on the Ministry’s own site as coming soon, and last year’s equivalent did not appear until October. The outturn is already known inside the building. What is slow is the publishing.