Bahrain’s economy up 4.9% in 2022 on fiscal reform, oil: IMF

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Bahrain experienced strong growth in 2022, in line with other GCC countries with continued fiscal reform momentum and high oil prices improving the country's fiscal and external balances, according to the International Monetary Fund (IMF) officials.

The kingdom's economy grew by 4.9% in 2022, mainly driven by 6.2% growth in non-hydrocarbon GDP while hydrocarbon GDP contracted by 1.4%, stated senior IMF officials after their recent visit to the Gulf country.

The mission was led by Asmaa El Ganainy who visited capital Manama from May 9 to 18 to conduct discussions for the 2023 Article IV consultation. The mission will be submitting the full report to IMF management and executive board, which is scheduled to discuss the Article IV Consultation in July.

The non-hydrocarbon growth was mainly driven by public, financial, and hospitality services and manufacturing sectors. CPI inflation accelerated to 3.6 percent on average in 2022, stated El Ganainy at the conclusion of the visit.

With the economic recovery well under way, ongoing fiscal reforms, and higher oil prices, the state budget deficit declined significantly, narrowing to 1.7 percent of GDP in 2022, from 6.8 percent in 2021, while the overall fiscal deficit declined from 11.6 to 6.1 percent of GDP, it stated.

Government debt declined to 117 percent of GDP in 2022 from 126 percent of GDP in 2021. The current account improved markedly and posted its largest surplus in decades, estimated at 15.4 percent of GDP in 2022, up from 6.6 percent of GDP surplus in 2021, it added.

According to the IMF team, the CPI inflation accelerated to 3.6% on average in 2022.

With the economic recovery well under way, ongoing fiscal reforms, and higher oil prices, the state budget deficit declined significantly, narrowing to 1.7% of GDP in 2022, from 6.8 percent in 2021, while the overall fiscal deficit declined from 11.6% to 6.1% of GDP, they stated.

Government debt declined to 117% of GDP in 2022 from 126% of GDP in 2021. The current account improved markedly and posted its largest surplus in decades, estimated at 15.4 percent of GDP in 2022, up from 6.6 percent of GDP surplus in 2021.