Moody's changes Bahrain view to negative

Moody's Investors Service said it changed the outlook on the government of Bahrain to negative from stable and affirmed its B2 long-term issuer and senior unsecured ratings.

“The change of outlook to negative reflects increased downside risks to Bahrain's ratings stemming from a larger than earlier expected weakening in fiscal metrics and ongoing uncertainty around the timing and the size of the augmentation of the financial support package for Bahrain from the fellow Gulf Cooperation Council (GCC) sovereigns. The very large fiscal deterioration during 2020 will make a path toward stabilizing the government's debt burden at a sustainable level significantly more challenging than Moody's had previously expected,” Moody’s said in a press release.

The agency also noted the oil price and economic shock triggered by the pandemic and persistently high off-budget spending, which Moody's said it forecasts to continue in the next several years, account for increased downside risks.

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