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Bond Market News
Bahrain Downgraded to B by Fitch
February 24, 2026
Bahrain was downgraded by a notch to B from B+ by Fitch. The downgrade reflects Fitch’s expectation that the nation’s public debt will continue to increase despite newly announced fiscal consolidation measures. Fitch estimates Bahrain’s debt at 146.8% of GDP in 2025, and projects it to hit 153.3% by 2027.
Additionally, it estimates that the nation’s budget deficit will widen to 13.4% of GDP in 2025, up from 10.1% in 2024, driven by lower oil revenues, higher interest payments, pension cost-of-living adjustments, and increased public-sector wages. A consolidation package launched in December 2025 should narrow the deficit, but only to about 9.2% of GDP by 2027, Fitch added. The government also plans to introduce a corporate income tax in 2027, and Fitch views its revenue projections as broadly credible.
Bahrain’s ratings are supported by strong financial backing from GCC partners, which provide concessional loans, grants, and investment programs. This support helps Bahrain maintain market access and sustain its currency peg.
It’s dollar bonds traded stable. For instance it’s 5.45% 2032s was at 96.1, yielding 6.18%.
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