S&P revises Bahrain outlook to stable on back of steady growth

More subdued but also more stable economy

DUBAI - The credit ratings agency Standard and Poor's said it has revised upwards the outlook on Bahrain to stable from negative on the back of steady growth and restrained political risks.
"In our view, the political, economic, and fiscal situation in Bahrain, while still unsettled, has improved such that we now view it as less risky," S&P said.
"We are therefore revising the outlook on Bahrain to stable from negative."
S&P said Bahrain has "emerged from the crisis with a more subdued but also more stable economy, primarily driven by a buoyant hydrocarbons sector and higher public spending.
"The outlook revision reflects our view of Bahrain's stable growth, the likelihood of no further deterioration in the political environment, the inflow of Gulf Cooperation Council (GCC) development funds, and our medium-term assumption of higher oil prices of about $111/barrel," the agency said.
It said this has led the agency to affirm Bahrain's long- and short-term sovereign credit ratings at BBB/A-2.
Bahrain is the smallest oil producer in the Gulf region with an output of about 40,000 barrels per day. However, oil accounts for 60 percent of exports and a similar percentage of government revenues.
Bahrain was rocked by Shiite-led protests taking their cue from Arab Spring uprisings in February 2011, triggering a heavy-handed security clampdown a month later.
Despite the crackdown, demonstrations have continued at a smaller scale and mostly in Shiite villages outside Manama. Protesters call for democratic change in the kingdom ruled by the Sunni al-Khalifa dynasty.
The International Federation for Human Rights says 80 people have died since the start of the uprising in Bahrain.