Bahrain’s real GDP growth is estimated to have risen by 4.9 percent in 2013, up from 3.4 percent the previous year, largely driven by the resumption of oil production after disruptions in 2012, Fitch Ratings has said.
The agency affirmed Bahrain’s long-term foreign currency issuer default rating at ‘BBB’ with a stable outlook.
Fitch Ratings also affirmed Bahrain’s local currency IDR at ‘BBB+’, it said in a statement.
Fitch said Bahrain’s external position is stronger than its ‘BBB’ rated peers, with a current account surplus of around 10 percent of GDP estimated for 2013, which will be the 10th consecutive year of surplus.
“Bahrain’s overall net creditor position, at almost 100 percent of GDP at end-2012, is the strongest of any similar-rated sovereign,” it added.
Fitch also said GDP per capita and broader human development and business environment indicators in Bahrain were close to the ‘A’ median.
But its statement warned that the country’s political situation has stagnated with low level violence on-going.
Bahrain’s national reform talks were last week indefinitely suspended after a key Sunni group said it would not participate until the opposition rejoined the process and a timeline to achieve a result was set.
The Bahrain National Dialogue has failed to advance since it was launched in February last year to help resolve the Gulf monarchy’s ongoing political unrest.
Fitch said it expects the political stalemate to continue. Parliamentary elections scheduled for October 2014 could trigger protests, leading to some additional flare-ups of violence, although Fitch added that it does not expect a material deterioration in the security situation.
Political unrest since 2011, in which the government has clashed with mainly Shi’ite-led pro-democracy protesters, has hurt Bahrain’s status as a regional financial hub while increasing pressure on the state budget.
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