Bahrain making good progress on fiscal balance plan, says finance minister
Bahrain reduces its deficit by 37.8% in the first six months of 2019, nonoil revenue increased by 47%
Bahrain, which does not have the vast oil wealth of fellow Gulf states, was hit hard by the 2014 slump in crude prices. The kingdom released a plan last year to overhaul its economy and fix its debt-burdened finances, aided by a $10 billion aid package from Saudi Arabia, Kuwait and the UAE.
“We’ve had very good execution so far,” Finance Minister Sheikh Salman bin Khalifa Al-Khalifa told Reuters, when asked if Bahrain would meet its target. “We’ve been very disciplined with regards to executing the fiscal balance plan and ensuring that we are executing with regards to the targets.” Al-Khalifa said Bahrain had reduced its deficit by 37.8 percent in the first six months of 2019, while Al-Khalifa said a September bond issue, the country’s first since the fiscal balance plan was launched, sparked good demand and with much tighter pricing than its previous bond issue.
He gave no details on borrowing plans for the coming year, but said half of borrowing needs would be met by the aid package from Saudi Arabia, the UAE and Kuwait, and half from the market.
As well as introducing a valueadded tax in January, the government has cut subsidies, raised fees and is pushing economic diversification and inward investment. Al-Khalifa said job creation had been a heavy focus during the International Monetary Fund and World Bank fall meetings in Washington this week.
“Maintaining economic growth is important but job creation is important regardless of where you are in the business cycle,” he said. In addition, he said the government had launched a mobile phone application, Tawasul, that allowed citizens to file complaints about the government. Thousands of complaints on issues ranging from road work to the opening hours of government offices had been received since 2014, and 100 percent had been addressed, he said.
“It’s been quite effective in receiving feedback,” he said. “It’s helped us a lot in terms of prioritizing policy.”