CBB welcomes reaffirmation of the Fitch credit rating for Bahrain

The Central Bank of Bahrain (CBB) welcomed Fitch Ratings announcement reaffirming Bahrain's Long-term foreign currency Issuer Default Rating (IDRs) at 'BBB'. The agency said Bahrain's outlook on the long-term IDRs was stable. Positive steps have been taken leading to the agency's reaffirmation of the IDRs, "Growth has rebounded after 2011, picking up to 3.4% in 2012 from 1.9% the year before. The normalization of oil production, after technical problems, should allow growth to strengthen to 5.5% in 2013. Capital spending, manufacturing investment and a further recovery in tourism will support non-oil growth of around 3.5%," said the agency's report. "This reaffirmation is a positive reflection of the government sound macroeconomic policies which helped in maintaining positive growth of the national economy," said Mr. Rasheed Mohammed Al Maraj, Governor of the Central Bank of Bahrain (CBB). "This rating followed a marked improvement across most economic sectors, which reflected positively in the growth rate of GDP in the first quarter of this year amounting 4.2%," added Mr. Al Maraj. According to the report, Bahrain's external position is much stronger than 'BBB' rated peers. A current account surplus of 12.1% of GDP is projected for 2013, which will be the tenth consecutive year that a surplus has been recorded. Bahrain's overall net creditor position, 81.1% of GDP at end-2012, is the strongest of any similar-rated sovereign. "GDP per capita and broader human development and business environment indicators are close to the 'A' median. The strong regulatory framework and local skill base, combined with low costs, are key supports to the financial sector," added the Agency's report. "Bahrain's economic resilience is due to the economic and structural reforms being implemented by the Government," said Mr. Al Maraj.