Bahrain announces major reforms

Announcement follows pledge by Saudi Arabia, Kuwait and the UAE to the tune of $10b in aid

Bahrain yesterday announced a comprehensive package of reforms that will secure the kingdom’s longterm fiscal stability.

A newly-announced Fiscal Balance Programme — the product of a far-reaching spending review conducted across all government departments — will see the country’s budget deficit eliminated by 2022, with the aim of delivering annual fiscal savings of 800 million Bahraini dinars (Dh7.75 billion), a statement posted on Bahrain News Agency (BNA) said.

The programme builds on previous fiscal consolidation efforts, where initiatives implemented during the period of 2015-2017 yielded annual fiscal savings amounting to 854 million dinars.

The Ministry of Finance said the programme was centred on six pillars designed to align non-oil government revenues with economic growth that include public expenditure reductions, through six dedicated Government Task Forces and a voluntary retirement scheme for government employees.

The announcement followed a pledge by Saudi Arabia, Kuwait and the UAE to the tune of $10 billion in aid to Bahrain.

The assistance will be spread over five years and cover half the government’s financing needs, including debt repayments as it begins a programme of savings aimed to eliminate the budget deficit by 2022.