Moody’s revises Bahrain’s outlook to stable on high oil prices and fiscal reform

Moody’s Investors Service revised the outlook on Bahrain to stable from negative as the country’s economy benefits from high oil prices and the government continues its fiscal reforms.

Bahrain’s economy is projected to grow 3.3 per cent this year and 3 per cent in 2023, according to IMF estimates.

The government also adopted cost rationalisation measures, including increasing VAT to 10 per cent to help the kingdom balance its budget by 2024. The doubling of the VAT rate will probably add 1.5 per cent to 2 per cent of gross domestic product to government revenue, Moody’s said.

The recent spike in oil prices has also improved the outlook for Bahrain’s public finances and the country’s external position, the agency said.

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