The International Monetary Fund revealed that Bahrain's economic recovery from the "Covid-19" pandemic will be gradual, expecting a growth of 3.3 percent this year, after a contraction of 5.4 percent in 2020.
Bahrain is suffering from the double shock of the Coronavirus crisis and the drop in oil prices, which raised its total fiscal deficit to reach 18.2 percent of GDP last year, from a deficit of 9 percent in 2019.
According to the Monetary Fund, public debt rose to 133 percent of GDP last year, from 102 percent in 2019. According to the fund, once the recovery intensifies, an ambitious and growth-friendly fiscal adjustment will be required, set within a reliable medium-term time frame to address the large imbalances in Bahrain, put the government debt on a steady downward path, and restore macroeconomic sustainability.
The amendment will help rebuild external reserves, strengthen the peg of the exchange rate that still meets Bahrain's needs, as a pillar of monetary policy, and support access to sustainable external financing. The fund indicated that Bahrain moved quickly to deal with the health and economic repercussions of the "Covid-19" pandemic, as it quickly made vaccines available to those most in need, and provided liquidity to companies severely affected by the restrictions of the comprehensive closure.
Source (Al-Sharq Al-Awsat Newspaper, Edited)
