Bahrain’s move to become a high tech financial hub could be undermined by concerns over its external financing position, a more hardline authoritarian streak, and diplomatic rift with Qatar.
Economic risk (MEDIUM): The downgrade of its sovereign debt to junk by all three ratings agencies highlights the low levels of reserves held by Bahrain.
Political risk (HIGH): Further crackdowns on opposition parties adds to tensions fuelled by the first state executions in seven years while the blockade of Qatar may have a domestic impact.
Financial risk (LOW): Bahrain has taken a hit to its equity market. It ranks second globally and first in the MENA for Islamic finance.
Commercial risk (LOW): Bahrain is in the top third of countries in the World Bank’s Doing Business Report index and has attracted record investment. It aims to become a fintech hub.