Bahrain Credit Rating Equal to that of Egypt, Bolivia and Jamaica...Public Debt Increases to 130%
2020-08-19 - 4:24 am
Bahrain Mirror: Fitch cut Bahrain's sovereign rating one step to B+, leaving it four levels below investment grade and on par with Egypt, Bolivia and Jamaica. The outlook is stable.
Bahrain, the smallest among economies of the six Gulf Cooperation Council members, is vulnerable despite a $10 billion bailout package secured from its regional allies in 2018.
The government sold $2 billion in dollar bonds in May, boosting foreign reserves that dropped to just 290 million dinars ($769 million) a month earlier, the lowest in decades.
The stockpile recovered to 674.9 million dinars in May, according to the latest central bank data.
"The extent of the shock has worsened Bahrain's credit profile and aggravated risks to medium-term debt sustainability," Fitch's analysts said.
Fitch forecasts the state budget deficit will widen to 15.5% of gross domestic product in 2020 from 4.6% in 2019.
The rise in this year's budget shortfall, combined with a 12% drop in nominal GDP, will push the ratio of government debt to economic output to 130% in 2020.