Mubasher: Fitch Ratings revised Bahrain's outlook to negative from stable and maintained its long-term foreign and local currency Issuer Default Ratings (IDR) at 'BBB-'and 'BBB', respectively.
The ratings agency predicted a wider double-digit deficit of 12.5% of GDP in 2015 and 10.7% of GDP in 2016, up from 5.5% of GDP in 2014, according to a report.
Fitch estimated a break-even oil price of $122 per barrel (bp) in 2015 and $118 per barrel in 2016, compared to average oil price assumptions of $55 bp in both 2015 and 2016 and $65 bp in 2017.
As a result, total revenues will fall to 17% of GDP in 2015 and 2016, from 24% of GDP in 2014.
Double-digit fiscal deficits are expected to lift general government debt substantially to 58.6% of GDP in 2015 and 65.2% of GDP in 2016, from 46.1% of GDP in 2014, according to the report.
Fitch expected favourable growth of 3.3% in 2015 and 3% in 2016 and 2017, somewhat below 4.5% in 2014 as oil production remained flat in 2015.
A small current account deficit of 2.3% of GDP is forecast in 2015 recovering to surplus in 2016.
A $1.5 billion bond issuance this year highlights continuing financing flexibility after a $1.25 billion issuance at a 30-year maturity in August 2014.
