BALANCE ELUSIVE

Bahrain launched its Fiscal Balance Programme (FBP) at end-2018, targeting a balanced budget in 2022, a target Fitch now expect to be reached further out.

The initial FBP projected government debt/GDP without the FBP would rise to 106 per cent of GDP, but would decline to 82 per cent in 2022 with the reforms. It assumed an average oil price of $60/ barrel (bbl). Initial steps at the start of 2019 included the introduction of VAT and a voluntary retirement scheme.

However, the Covid-19 pandemic blew the FBP off course, disrupting activity and pushing down oil prices.