Fitch revises Bahrain to negative

Fitch Ratings said it revised Bahrain's outlook to negative from stable and affirmed its long-term foreign and local currency issuer default ratings at BBB- and BBB, respectively.

The issue ratings on Bahrain's senior unsecured foreign and local currency bonds were also affirmed at BBB- and BBB, respectively, along with the country ceiling at BBB+ and short-term foreign currency issuer default rating at F3.

Fitch's lower oil price forecasts are outweighing the effects of a greater policy response than previously anticipated on Bahrain's fiscal position. The agency forecasts a wider double-digit deficit of 12.5% of GDP in 2015 and 10.7% of GDP in 2016, remaining in high single digits by 2017, up from 5.5% of GDP in 2014. This adds to recorded fiscal deficits every year since 2008.

Fitch estimates a break-even oil price of $122/b in 2015 and $118/b in 2016 versus average oil price assumptions of $55/b in both 2015 and 2016 and $65/b in 2017.

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