Moody’s Investors Service has changed its outlook on Bahrain to stable, up from negative. However, it has affirmed its B2 long-term issuer and senior unsecured ratings. The change of outlook to stable reflects “an easing of downside risks to Bahrain’s ratings.” According to the ratings agency, the increase in oil prices since early 2021 will remain elevated for the next few years.
This will contribute to improving the outlook for the sovereign’s fiscal and external balances, reducing the rate of government debt accumulation and lowering government liquidity and external vulnerability pressures. Moody’s stable outlook on Bahrain takes into consideration the government’s renewed commitment to its medium-term fiscal adjustment programme.
The rating is also supported by its relatively high income per capita and a relatively well-diversified economy compared with most other GCC sovereigns, which provide a degree of shock absorption and economic resilience, Moody’s said.
Last month, Fitch Ratings also affirmed Bahrain’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘B+’ with a Stable Outlook.
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