Mubasher: The Bahraini government has not been handling the drop in oil prices well, showing a slow response in the stabilisation of public debt and the protection of international reserves.
The GCC country’s deficit hiked in the last three years, which raised the public debt to dangerous figures, marking up 90% of the gross domestic product (GDP), according to a report released by Moody’s.
The global rating corporation forecast that Bahrain would maintain its budget deficit, with debt rising to 100% of GDP.
“Moody’s estimates that in 2018 the government will need to finance a fiscal shortfall of $3-$4 billion – the exact figure depending on whether off-budget spending is included in the total deficit amount.”
This deficit includes estimated external and domestic debts of $960 million and $540 million, respectively, Moody’s data showed.
The Bahraini economy is, undoubtedly, in need of a support package from its allies in the GCC, which would support its sovereign's credit profile and financial needs in the coming year.
“Beside new financial support that we expect to be announced, GCC assistance will continue to include disbursements toward the financing of development projects that the GCC committed in the past, although disbursements have so far been slow.”
