Economic Analysis - Successful Bond Issuance Points To Retention Of Investor Confidence - 02 OCT 2017

BMI View: Bahrain's fiscal position will deteriorate further over the coming years, as large budget shortfalls lead to sharp increases in public debt. Manama's successful international bond issuance on September 13 nevertheless point to still-strong investor confidence in the economy, as expectations remain for Saudi Arabia to provide support in the event of a crisis.

Manama's successful USD3bn international bond issuance on September 13 points to the retention of strong investor confidence in the Bahraini economy - despite persistently large budget shortfalls, a growing debt burden, and rising borrowing costs. We expect this to remain the case over the years ahead, as market expectations for neighbouring Saudi Arabia to support Bahrain in the event of a fiscal or financial crisis are maintained.

Fiscal Position To Weaken Further...

Persistent Budget Shortfalls Insufficient To Deter Investors
Bahrain - Public Debt & Fiscal Balance
e/f = BMI estimate/forecast. Source: National sources, BMI

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