Bahrain aims for strong economic rebound this year, Shura approves national budget

TDT | Manama

The Daily Tribune – www.newsofbhahrain.com

Bahrain’s two-year state budget now awaits His Majesty King Hamad bin Isa Al Khalifa’s approval.

This came after the Shura Council yesterday unanimously approved the proposed budget for fiscal years 2021-2022 which will be referred to His Majesty King Hamad by National Assembly and Parliament Speaker Fouzia Zainal for ratification.

The budget expects total revenues to reach BD2,406 million in 2021 and BD2,457 million in 2022.

Expectations for expenditures are BD3,614 million in 2021 and BD3,569 million in 2022, producing an overall deficit of BD1,208 million in 2021, and BD1,112 million in 2022.

Finance and National Economy Minister Shaikh Salman bin Khalifa Al Khalifa said that the welfare of the citizens was the top priority in drafting the state’s general budget.

He assured that the budget will be used properly for the progress and development of the country, and in maintaining social support for citizens and improving the efficiency of government services.

Shaikh Salman pointed out that the government is committed to implementing a balanced fiscal programme, taking into account stimulating economic recovery during the next phase, and continuing to create more job opportunities for citizens.

The Kingdom has lined up key measures to support economic recovery as it aims for a strong rebound starting this year after a slowdown due to the coronavirus (COVID-19) pandemic.

Last month, the International Monetary Fund (IMF) had said that Bahrain’s economic recovery from the pandemic will be gradual, with growth projected at 3.3% this year after a 5.4% contraction in 2020.

The Kingdom has been battered by the twin shocks of the coronavirus crisis and lower oil prices, which pushed its overall fiscal deficit to 18.2% of gross domestic product last year from a 9% shortfall in 2019.

Also last month, the government announced plan to present a bill in parliament in the next few months to allow the Future Generations Reserve Fund to take higher deductions from oil sales.

The deductions will help replace money withdrawn from the fund to support the general budget as part of efforts to combat the coronavirus (COVID-19) pandemic and sustain the Kingdom’s economic recovery.

Shaikh Salman said the move would boost the revenues of the fund which plays a vital role.

The current law imposes a deduction of a dollar in the event that the price of one barrel exceeds $40.

He underscored the importance of providing sustained support to the fund, which contributed to mitigating the fallout of the pandemic which had global repercussions.