S&P shifts Bahrain view to positive

S&P said it revised the outlook on Bahrain to positive from stable.

“The positive outlook primarily indicates that we expect the government to implement further reforms to keep fiscal deficits on a decreasing trajectory. Budgetary consolidation is supported by the implementation of two pillars of Bahrain’s fiscal reform plan – the introduction of a value-added tax (VAT) and a voluntary retirement program,” said S&P in a press release.

S&P said it sees the deficit falling to 4.2% of GDP in 2022 compared with an average of 12% from 2015-2017. “Building on reform momentum after successfully introducing VAT and reducing the public sector workforce by about 18%, we believe that the government’s further budgetary consolidation measures could lead to lower budget deficits than we currently forecast,” S&P said.

The agency also affirmed its B+ long-term foreign and local currency sovereign credit ratings.

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