5 October 2018: The Kingdom of Bahrain has this week unveiled further details of its Fiscal Balance Programme, designed to further support Bahrain’s robust economic growth, while countering the effects of the fall in oil prices in recent years and eliminating the Kingdom’s budget deficit by 2022.
Bahrain’s economy continues to grow strongly – by 3.9% in 2017, with non-oil growth of 5% in the same year, above the regional average. Meanwhile, Foreign Direct Investment in the Kingdom continues to rise, reaching US$519 million in 2017.
At the same time, the Government recognises the importance of tackling the fiscal effects of the fall in oil prices in recent years, and to this end implemented a Fiscal Balance Programme at the start of the fall in oil revenues. This has already cut administrative spending and undertaken significant structural subsidy reforms, yielding annual fiscal savings of BHD 854 million.
Further details of the programme, announced this week, will bring further annual savings of BHD 800 million, eliminating the Kingdom’s budget deficit and seeing overall debt levels falling by 2022.
These Programme includes six points: Public expenditure reductions; voluntary retirement scheme for government employees; balancing Electricity and Water Authority (EWA) expenditures and revenues; streamlining cash subsidies towards eligible citizens; improving efficiency of government expenditures; and simplifying government processes and increasing non-oil revenues.
These measures will ensure Bahrain’s finances are put on the same strong footing as its broader economy while being ambitious, swift and targeted to ensure growth is not affected. Further, the Programme will support the broader priorities of increasing the role of the private sector in the economy; supporting greater innovation and competitiveness; and enhancing citizens’ living standards.
5 October 2018
More details can be found at https://www.mof.gov.bh/fbp.aspx