Bahrain to bolster pipeline projects

Fitch Ratings expects Bahrain to continue to benefit from savings through the implementation of development projects financed by fellow Gulf Cooperation Council (GCC) countries Saudi Arabia, the United Arab Emirates and Kuwait.

"Lower oil prices are not assumed to impact the flow of funds from these countries," Fitch analyst Christopher Findlay said.

Fitch, which recently revised Bahrain's outlook to negative, estimates growth rates of 3.3% in 2015 and 3% in 2016 and 2017 for the country, much lower than the 4.5% in 2014 as crude oil production remained flat in 2015.

"Projects have been ramped up significantly this year (2015) and will continue to be so over the forecast horizon," Fitch said. "Growth will be supported by the non-hydrocarbon sector expanding by 4.4% in 2015, and remaining around 3.5% in 2016 and 2017, underpinned by manufacturing, construction, tourism and social and personal services."

The kingdom's overall pipeline of projects stood at USD 72.3 billion by mid-December 2015, up 17.2% from a year earlier, according to the latest quarterly report from the Bahrain Economic Development Board (EDB).

It said the pipeline of "strategically significant" infrastructure projects undertaken by the GCC Development Fund, government holding firms, and the private sector is estimated at around USD 32 billion.