The Central Bank of Bahrain said it regrets a recent downgrade in Bahrain's sovereign rating as a reaction to the current financial standing of the oil industry.
Bahrain was included in the list of oil exporting nations for which Standard & Poor's recently issued downgrades of the sovereign ratings due to the existing oil price challenge.
The government of Bahrain has made large, progressive movements since the spring of 2015 to implement a strategic plan with an objective to support the growth and sustain the fiscal environment of the country for the foreseeable future. The government has been aware of the need to broaden its business and trade options to better support the economy, in terms of GDP composition, which is now 80 percent non-oil.
The program designed specifically for the task is comprised of three main ideas - eliminating excess spending within the government while increasing public sector efficiency, streamlining government appropriations and continuing growth and diversification through a concentrated effort on engaging foreign investors, encouraging regulatory reforms and putting a number of infrastructure projects on a fast-track to completion.
Not only have government entities put a number of policies into planning, but vital steps have already been taken to ensure the three pillar plan works. A pricing policy has been placed on natural gas. Government support on items like meat, liquid fuels and utilities has been restructured and the number of government agencies has decreased to better public services.
Central Bank leaders said the reforms must continue at a fast pace in order to ensure Bahrain’s fiscal sustainability. In addition, the necessary changes will help build, and actually grow, the economy for the immediate future and beyond.