Bahrain Mirror: Moody's on Friday downgraded Oman's and Bahrain's long-term bond ratings, citing limited progress in addressing the nation's vulnerabilities to the weak oil price environment.

The ratings agency lowered its outlook on Oman's longer-term bond rating to Baa2 from Baa1 and changed its outlook to ‘negative' from ‘stable'. S&P Global Ratings junked Oman back in May. The agency said that Oman's fiscal performance last year and in the first few months of 2017 were weaker than was suggested by the changes in oil price and the government's reform announcements.

Meanwhile, Moody's downgraded Bahrain's long-term issuer rating to B1 from Ba2, and maintained its negative outlook for the country.

"The credit profile of the Bahraini government will continue to weaken materially in the coming years, predominantly because despite some fiscal reform efforts there is a lack of a clear and comprehensive consolidation strategy," the credit ratings agency said in its rationale for the downgrade.

It also expected that Bahrain's government debt burden and debt affordability would deteriorate significantly over the coming two to three years.

Considering Bahrain's dependence on debt funding to finance its large fiscal deficit, and its limited sovereign wealth fund assets it can draw on, Moody's raised doubts if the country can return to more sustainable government debt levels.

The agency had downgraded Bahrain and Oman's ratings in May 2016.

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