MANAMA: S&P rating agency expects Bahrain’s economy to rebound in 2021 as oil prices recover and regional activity increases.
It added that Bahrain’s economy will shrink 5% in 2020 because of low oil prices, although government stimulus measures should provide some support, S&P in a statement said.
The economic outputs of Abu Dhabi and Bahrain will be reduced in 2020 due to lower oil production amid the coronavirus pandemic, S&P Global Ratings said in separate releases.
Abu Dhabi’s economic output will shrink 7.5%, and Ratings forecasts real GDP growth in Abu Dhabi to gradually recover from 2021 on the back of higher oil prices and improving domestic demand.
“Abu Dhabi’s fiscal position is underpinned by hydrocarbon revenue and affected by oil price movements, despite government’s efforts to increase non-oil revenue,” the rating agency said.
S&P expects the United Arab Emirates’ central bank to maintain the dirham’s peg to the US dollar “backed by its foreign international reserves and the government’s large external assets.”
