S&P turns Bahrain view to stable

S&P said it revised Bahrain’s outlook to stable from negative and affirmed the B+ ratings on the sovereign.

“We expect the government's accumulation of debt to moderate, supported by recently announced measures that provide more clarity with regard to its medium-term fiscal consolidation program. The government has updated and extended its fiscal balance plan, changing the target date for a balanced budget to 2024 from 2022. The government has announced that the value-added tax (VAT) rate will double to 10% starting in 2022, strengthening non-oil revenue,” S&P said in a press release.

The agency said it sees the higher VAT possibly contributing receipts of about 3% of GDP over the medium term, up from about 1.7% in 2021.

The outlook balances an improving fiscal position and help from some Gulf Cooperation Council countries against high government debt and debt-service burden, S&P noted.

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