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- The MoneyHatch Newsletter, Edition 18
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June 5th, 2025
Bahamian Financial Updates
Economy News
A Surplus at Last?
The government is celebrating its first post-Independence budget surplus: an estimated $75 million, or 0.5% of GDP.Eyewitness News reports that the revenue collections for the current fiscal year are projected at $3.89 billion, slightly above planned expenditures of $3.82 billion. The surplus is credited to increased tax revenues, tourism recovery, and controlled spending.
The Prime Minister also announced a 5% VAT rate on essential items like diapers, feminine products, prescription meds, and medical supplies starting September 1.
What This Means for Your Finances:
There’s no direct impact on your paycheck just yet, but the 5% VAT on essentials starting September could help you save a few dollars at the pharmacy or grocery store.
The broader fiscal picture is good for the country’s credit rating, which could eventually lower borrowing costs and reduce inflation pressure. But most of the benefits, like debt reduction and agency upgrades, play out long-term. It’s important to note that these are still projections. The fiscal year hasn’t ended yet, and plenty can change. Also, despite the projected surplus, the government will still borrow hundreds of millions in new debt this year, so this isn’t a sign we’re out of the woods.
And then comes the biggest question of all: what are we going to do with the surplus money?
Overall though, while this is positive news, but keep your budget tight and your expectations realistic.
Bahamian Imports Surge to Nearly $5 Billion
According to BNSI data, The Bahamas imported nearly $5 billion worth of goods in 2024, an 18 percent jump from 2023. Machinery and transport equipment led the list, followed by food, fuel, and manufactured goods. At the same time, exports declined to $689 million, pushing the trade deficit to a record $4.25 billion.
The United States remains our largest trade partner by far, accounting for 83 percent of imports and 65 percent of exports.
What This Means for Your Finances:
The surge in imports shows strong consumer demand and continued infrastructure investment, but it also reinforces how dependent we are on foreign goods. A trade deficit this large makes the country more vulnerable to global price swings, currency pressure, and inflation, especially since so much of our food and fuel comes from abroad. Not even to mention how manufacturing here is at an all time low.
It also puts strain on the Bahamian dollar peg. To maintain the one-to-one exchange rate with the US dollar, we need solid foreign reserves. A $4.25 billion deficit makes that harder to sustain without major gains in tourism, exports, or foreign investment.
You may not feel an immediate effect, but long term, deficits this big could make essentials more expensive and financial stability harder to maintain without serious economic diversification.
Student Visa Crackdown in the US
Trump’s administration has ordered US embassies to pause new student visa appointments while it prepares to expand social media vetting for applicants. The policy targets student and foreign exchange visas and comes amid broader crackdowns on US universities, which Trump accuses of failing to address antisemitism during pro-Palestinian protests. Chinese students are among the most affected, but international students in general (including from The Bahamas) face increased scrutiny. Existing visa interviews can proceed, but new appointments are paused indefinitely.
What This Means for Your Finances:
If you or your child is hoping to study in the US, this adds major risk and unpredictability. You could spend thousands on applications, test fees, deposits, and travel prep only to face a sudden delay or denial. Even if things improve later, that is not how to plan your finances.
This is unfortunate but may be the push some families need to consider studying in Canada, the UK, or elsewhere. These alternatives may offer more stability and just as much opportunity. You cannot depend on policy shifts happening exactly when you need them. Financial planning needs certainty and backup options, not just hope.
It is also a strong reminder that The Bahamas needs to invest in education at home. A reliable, high-quality local system would reduce our dependence on foreign institutions and help families avoid the financial risk of studying abroad.
Bahamas Eyes 32% Solar by 2030
The government says The Bahamas is on track to exceed global solar power targets by 2030, with 32 percent of national electricity needs expected to be met by solar. Prime Minister Davis says Bahamians could begin seeing lower electricity costs “within months, not years” as fully funded, large scale projects roll out across multiple Family Islands.
These hybrid systems will combine solar, battery storage, and LNG to deliver cleaner, more reliable power to places like Harbour Island, San Salvador, Cat Island, and Moore’s Island.
What This Means for Your Finances:
If this actually gets done, electricity bills could finally come down. Bahamian households spend hundreds each month on unreliable power. Even a small reduction in costs could mean more money in your pocket for savings or everyday expenses.
But keep your expectations realistic. These are signed agreements, not operational systems. The government says these projects will go live within 18 months. Until that happens, assume current power bills are here to stay.
Also remember we are heading into election season. Promises and announcements will be coming fast. That does not mean they will become reality. Base your financial decisions on what exists, not what might happen. If these projects do materialize, they could bring long term savings. Until then, stay cautious.
Business News
Bahamasair and Emirates Sign Interline Deal
According to The Nassau Guardian, Bahamasair has signed a memorandum of understanding with Emirates Airline, allowing travelers across Asia, the Middle East, and Africa to book single-ticket journeys to The Bahamas through key international gateways. The agreement includes potential staff training, tech support, cargo collaboration through Miami, and future integration with Emirates’ Skywards program.
What This Means for Your Finances:
More international access could mean more tourists, more spending, and more jobs if visitors come from high-spending markets like the UAE or India. It also signals that Bahamasair is positioning itself beyond being just a domestic airline, which could lead to better service, improved training, and more stable operations over time.
It’s also worth noting that direct flights or even streamlined connections from non-US countries are a win for tourist diversification. And while The Bahamas still needs to diversify away from tourism long-term, stopover tourism is always more valuable than cruise ship visitors. If this agreement helps shift more travelers into longer stays and higher spending, the broader economy stands to benefit.
Just remember though, this is just an agreement for now. No new routes have launched. No changes are happening immediately. These deals usually take a while to implement. Still, it is a potential positive for the economy.
The government is borrowing $80 million to rebuild the Glass Window Bridge
According to EWNews, the Bridge Authority will take on $80 million in new debt to fund the reconstruction of the Glass Window Bridge in North Eleuthera. That’s $20 million more than the $60 million previously quoted, a jump that’s already drawing criticism from the Contractors Association, which called the number astronomical and absurd.
The government says updated designs and post-pandemic inflation are the reason, not wasteful spending.
What This Means for Your Finances:
Big infrastructure projects matter, especially when it comes to bridges and hospitals, but they are not free. Borrowing $80 million for this project (and an additional $75 million for other projects) adds to national debt and will need to be repaid with interest. That affects future budgets and could lead to higher taxes, increased fees, or spending cuts elsewhere.
Even with a projected budget surplus, the government still has to borrow for major upgrades. This means financial breathing room is limited. While better infrastructure is welcome, the cost must be watched closely. Transparency is essential. When prices rise without clear explanation, trust in government spending erodes.
💡Financial Tip of the Week: Diversify with Purpose 💡
Do not keep all your money sitting in one place. A savings account is a good start but not a strategy. Diversify into investments, real estate, precious metals, or even foreign currencies slowly, methodically, and with purpose.
But do not rush. Before you invest a cent, make sure you have enough cash set aside for emergencies and short-term goals. Diversification is for the money you do not plan to touch anytime soon.
Take your time to learn. Understand the tradeoffs between risk, liquidity, and returns. Look into stocks, bonds, real estate, and other asset types. Diversification is not about chasing trends. You want to build resilience and protecting the money you worked hard and smart to earn.
Just Skimming Through
Economy:
2025/2026 Budget Surplus
The government is projecting its first budget surplus since Independence, but still plans to borrow heavily.
Bahamas Hits New Trade Deficit
Imports hit nearly $5 billion in 2024, while exports fell. The trade deficit is now the largest on record.
New Student Visas Applications on “Temporary” Pause
Trump’s visa crackdown could make it harder for Bahamian students to study in the US.
Bahamas Renewable Energy Goal
The Bahamas says it will beat global solar targets by 2030, with benefits “in months not years” — but it’s also election season.
Business
Bahamasair and Emirates Deal
Bahamasair signed a major deal with Emirates to expand global connections.
Bahamas government borrowing $80 million
The government is borrowing $80 million to rebuild Glass Window Bridge.
Financial of Tip of the Week
Financial Tip of the Week
Do not keep all your money in one place. Once you have an emergency fund, start learning how to grow the rest through assets like stocks, bonds, or real estate.
Feedback Welcome
Do you like this style of newsletter? Let us know your thoughts—we’re always working to make The MoneyHatch your go-to source for Bahamian financial updates.
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