Bahrain’s economic outlook positive with B+/B rating: S&P

Bahrain’s economic outlook positive with B+/B rating: S&P

MANAMA: Mahmood Rafique, Editor: S&P Global Ratings has revised its Bahrain’s outlook to positive from stable and affirming B+/B long and short-term foreign and local currency sovereign credit ratings.

“The positive outlook indicates that we expect the government will continue implementing fiscal reforms to reduce the budget deficit and benefit from additional support from other Gulf Cooperation Council (GCC) sovereigns, if needed,” S&P in a statement said.

“We could raise the ratings over the next 12 months if the government’s budgetary position improves beyond our expectations, contributing to a sustained reduction in net debt to GDP alongside strong and sustained current account surpluses that would support Bahrain’s external position. Further support for an upgrade could come from an acceleration in productivity-led per capita economic growth,” on upside scenario the S&P stated.

Talking about the downside scenario, the S&P said that it could revise the outlook to stable if the government’s net debt and debt-servicing burden increase beyond our current assumptions despite fiscal consolidation measures. “We could also revise the outlook to stable if foreign currency reserves decline sharply, limiting the government’s ability to service its external debt and weighing on monetary policy effectiveness.”

“The positive outlook on Bahrain reflects the government’s