Fitch: Bahrain’s Long-Term Foreign Currency Issuer Default Rating Downgraded to B+; Stable Outlook

Bahrain’s Long-Term Foreign Currency Issuer Default Rating (IDR) has been downgraded to B+ from BB- by Fitch Ratings (Fitch), with a Stable Outlook.

The downgrade is based on significant rises in Bahrain’s budget deficit and government debt, a steep decline in gross domestic product (GDP) and further constraints on low foreign exchange reserves, as a result of lower oil prices and the COVID-19 pandemic. According to Fitch, the extent of the shock has negatively impacted Bahrain’s credit profile and brought about heightened risk to medium-term debt sustainability.

However, Fitch notes that the Government of Bahrain has made progress with its medium-term Fiscal Bala...