Economy ‘is on the right path’: Bahrain

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Bahrain’s fiscal balance programme announced in October 2021 is on the right path, the World Bank has said.

Bahrain’s economy witnessed an increase in revenues during the first half of 2022, which compensated for increases in spending, achieving a surplus in public finance of $88 million, according to World Bank regional director for the GCC Essam Abu Sulaiman.

Improving public finances results in an improvement in public debt, he pointed out.

Bahrain’s economy is continuing its gradual recovery, with a growth rate expected to stabilise at 3.2pc this year after witnessing an acceleration in the pace of growth in 2022, mainly driven by the non-hydrocarbon sector and strength of the manufacturing industry along with return to normal life after the pandemic, he told our sister paper Akhbar Al Khaleej.

This stability reflects the government’s continued efforts in controlling public finances as part of a programme aimed at achieving fiscal balance, he added.

He stressed the need for Bahrain’s economy to focus on green investments, while adopting a green growth strategy and continuing to invest in the non-oil sector.

Mr Sulaiman stressed that Bahrain is capable of becoming one of the leading countries in the production of renewable energy.

However, he warned of what he described as risks facing these expectations, including intensification of geopolitical conflicts, increase in adverse conditions leading to stagflation, escalation of instability in the financial sector, continuous pressures on supply chains, exacerbation of food shortage insecurity across the world, and rise in food and energy prices, which causes erosion of real incomes.

He expected the global growth rate to slow sharply to 1.7 per cent this year, the third weakest pace in nearly three decades, overshadowed only by the global recessions caused by the pandemic and the global financial crisis.