The International Monetary Fund expected the Bahraini economy to recover this year with a growth rate of 3.3 percent, and that the overall fiscal deficit will shrink to 9 percent, warning that the public debt will rise to 155 percent of GDP in 2026.
The International Monetary Fund urged Bahrain to implement financial reforms and reduce public debt, which recorded a sharp increase last year being affected by the Coronavirus crisis. Bahrain has responded quickly to contain the Covid-19 pandemic, as it launched a large-scale vaccination campaign, but the crisis led to an economic contraction of 5.4 percent in 2020 and the non-oil economy shrank by 7 percent.
The IMF revealed that the total fiscal deficit increased to 18.2 percent of GDP last year from 9 percent in 2019.
The Fund called for urgent reforms at the level of public finances to address major imbalances, reduce public debt, and restore the sustainability of macroeconomic conditions, along with ensuring the support of the most vulnerable groups. IMF called for setting an ambitious plan characterized by growth support to correct the fiscal conditions and implement them in the medium term, with a focus on mobilizing the domestic revenues and rationalizing expenditures.
Source (Al-Arabiya.net, Edited)
