Bahrain State Budget (2019-20) passed - Puts deficit reduction program ahead of schedule

Manama, May 30 (BNA): The Government of Bahrain today announced that the State Budget 2019-20 has been passed into law, demonstrating that the Kingdom is committed to realising the aims of the Fiscal Balance Program and paving the way for strong growth and further fiscal consolidation. Updated forecasts included within the budget demonstrate the government’s deficit reduction program is well ahead of schedule, with a primary budget surplus forecast for 2020. A projected 2018 budget deficit of 9.8% of GDP has fallen to 6.2% of GDP; a fall of over a third, putting the Kingdom on track to deliver a balanced budget in line with the Fiscal Balance Program announced in October of last year. The State Budget Law, which was passed by Bahrain’s elected chamber of parliament, will ensure the Kingdom continues to pursue responsible fiscal policy while safeguarding economic growth, job creation, and the delivery of essential services for citizens, while projecting further reductions in the budget deficit to 4.7% in 2019 and 3.9% in 2020. The Kingdom’s path of fiscal consolidation, supported by strong infrastructure spending, has been positively recognized by international bodies and credit rating agencies. Preliminary figures indicate that the Bahraini economy has made a strong start to the year, with robust growth in a number of sectors during Q1 2019. With growth gradually strengthening across the region, Bahrain has benefitted from increased positive spillovers in areas such as tourism and trade. Other positive indicators include growth in imports and exports, business loans, and building permit approvals. Favourable regional liquidity markets are boosting the availability of capital, positively affecting Bahrain’s All Share Index, which rose by 5.7% during Q1 2019. Bahrain’s Minister of Finance and National Economy, H.E. Shaikh Salman bin Khalifa Al Khalifa said: “The 2019-20 state budget clearly demonstrates that Bahrain is prioritising sound fiscal and economic policies while safeguarding the continued prosperity of citizens. We welcome the cooperation of parliament, which continues to play a valuable role in our efforts to deliver a strong, sustainable economy. The deficit is down by over a third and early indictors show robust GDP growth in the first part of this year, putting the Kingdom well on track to deliver a balanced budget in line with the Fiscal Balance Plan 2018-2022.”