Financial News: Fitch Downgrades Bahrain's Sovereign Rating Outlook

Fitch Downgrades Bahrain's Sovereign Rating Outlook

02/24/2025 - 05:00:00 (RTTNews)

(RTTNews) - Fitch Ratings lowered the outlook on Bahrain's sovereign ratings to 'negative' on Monday, citing increasing debt burden of the government.

The outlook was downgraded from 'stable', while the credit rating was affirmed at 'B+'.

The rating agency said sustained wide deficits amid a high and rising interest burden, increasing debt/GDP and further delays to planned reforms were the reasons for lowering the outlook.

Fitch noted that Bahrain's public finances remain weak, with debt/GDP staying more than double the 'B' category median, high fiscal dependence on oil revenue and low levels of forex reserves.

The agency forecast the government debt to rise to 136 percent of GDP in 2026 with a continued upward trajectory over the medium-term.

Further, the Fitch-adjusted general government budget deficit is projected to remain wide at close to 9 percent of GDP in 2025 and 2026, after an estimated 9.5 percent in 2024.

Bahrain would require a substantial increase in Gulf Cooperation Council concessional funding to stabilize and reduce debt, the agency observed.

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