Bahrain Mirror (Exclusive): Fitch Ratings has affirmed Bahrain's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB-' with a stable outlook.

The agency said in a statement it issued on Thursday (February 28, 2019) that weak public finances, high fiscal dependence on oil revenue and political constraints on enacting reforms all weigh on the ratings.

In March 2018, Fitch reduced Bahrain's credit rating from (BB+) to (BB -), a non-investment degree.

But the agency said Bahrain's economy enjoys strong financial support from the Gulf states and a high per capita gross domestic product (GDP).

The government's Fiscal Balance Plan (FBP) announced in October 2018 and supported by $10 billion funding from Saudi Arabia, Kuwait and the UAE present a credible opportunity for Bahrain to stabilise its public finances.

In 2019-2022 Bahrain faces $5.3 billion of maturing external debt.

Bahrain will need the equivalent of $2.3 billion on average per year of new financing in 2019 and 2020 to cover the budget deficit.

Last Monday, the cabinet approved the general budget of the State with a total deficit of 708 million dinars ($1.878 billion) in the fiscal year 2019 and 613 million dinars ($1.626 billion) in 2020.

Fitch expects government debt/GDP to stabilise at just over 95% in 2019-2020 and to decline gradually to 2022.

Government debt/GDP continued to rise in 2018, to 93% from 88% in 2017, according to Fitch.

Bahrain is considered the least productive of oil resources of the Gulf Cooperation Council (GCC). It produces about 200,000 barrels of crude oil per day.

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