A final version of Bahrain's budget shows that non-oil revenues and government expenditures will fall below previous forecasts
Bahrain expects to fall short of some of the goals it set as part of a fiscal adjustment programme tied to a $10 billion economic aid package from some of its GCC allies, according to a final draft of its state budget for the next two years.
The aid package pledged by Saudi Arabia, the UAE and Kuwait was linked to a number of reforms designed to eliminate the Gulf kingdom’s budget deficit.
Earlier in May, Bahrain revised its budget, indicating that it may take longer than expected to balance the country’s budget.
The final budget shows that non-oil revenues and government expenditures will fall short of previous forecasts.
In a statement said to Reuters, however, a finance ministry spokesperson said that Bahrain’s deficit reduction programme was ahead of schedule, with the budget having been reduced to 6.2 percent of GDP compared with a projected 9.8 percent.
The estimates, the spokesperson added, “were expressed as ranges, not specific year-on-year targets”, while the state budget projected deficit, non-oil revenue and expenditure that “sit at the more ambitious end of the forecasted ranges.”
According to International Monetary Fund (IMF) forecasts, Bahrain’s oil revenues will constitute 5.4 percent of GDP in 2019 and 5.7 percent in 2020, falling short of the 6.2 and 6.6 percent outlined in the fiscal adjustment programme.
Additionally, state spending is still expected to account for 24 percent of GDP in 2019 and 23.1 percent in 2020, compared to previous targets of 22.6 and 21.6 percent. Without the fiscal reform programme, state expenditure would have accounted for 25.5 and 25.2 percent of GDP in 2019 and 2020, respectively.