Khaberni - Standard and Poor's raised Kuwait's credit rating with a stable future outlook thanks to progress in fiscal reforms and the strength of its budget. In contrast, the agency downgraded Bahrain's rating due to ongoing financial challenges and rising government debt.
Standard and Poor's stated that the stable future outlook reflects its expectations that Kuwait’s overall and external balance sheets will remain very strong over the forecast horizon.
The agency added that the upgrade of Kuwait's rating reflects the impetus from financial reform and reduced financing constraints, according to "Reuters".
The agency raised Kuwait's rating to "AA-/A-1+" based on progress in reforms with a stable future outlook, noting that it expects the Kuwaiti government will continue to work on a medium-term financing plan that supports increasing non-oil revenue sources.
Conversely, the agency downgraded Bahrain's rating to "B" amid financial challenges with a stable future outlook.
The agency stated that the stable future outlook indicates that Bahrain will continue to benefit from support from other Gulf Cooperation Council countries, adding that the downgrading of Bahrain's rating reflects the risks associated with rising government debt that has accumulated due to ongoing pressures on financial conditions and a high fiscal deficit.
Standard and Poor's expects Bahrain’s net debt to increase by a larger percentage, reaching about 10% of the gross domestic product in 2025 due to significant off-budget expenditures.
