2023-11-25 07:43:59
On Friday, the Standard & Poor’s credit ratings agency revised Bahrain’s outlook from “positive” to “stable”, attributing this to spending pressures that will worsen the country’s fiscal deficit more than the agency had previously expected.
However, the agency maintained the country’s rating at “B+/B” amid expectations that the government will implement measures to reduce its budget deficit and will benefit from additional support from other Gulf states if necessary.
The agency said in a statement: “We expect the government to activate reforms to strengthen its financial position, largely by increasing non-oil revenues until 2026.”
The agency now expects the fiscal deficit to be between three and four percent of Bahrain’s gross domestic product during 2023-2026, compared to two to three percent in its previous review.
In the first quarter of 2023, Bahrain achieved economic growth of two percent, supported by gains in the non-oil sector in light of the decline in oil production due to seasonal factors.
This year, the oil-producing country introduced a new “global licence” that provides benefits to companies implementing large-scale investment projects in the country as it seeks to reduce debt while promoting growth and job creation.
Fitch maintained Bahrain’s rating at “B+” with a stable outlook last July, while Moody’s revised its outlook to stable from negative and affirmed the credit rating at “B2” in April of last year.
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