Bahrain has approved a new plan for economic growth and fiscal balance, which includes postponing the goal of eliminating the budget deficit for two years until 2024 and increasing the value-added tax from 5 percent to 10 percent.
The Fiscal Balance Program aims to reduce expenses by reducing operating expenses in government agencies, enhancing the efficiency of project budgets, controlling expenses related to the workforce, and enhancing the efficiency and fairness of direct government support to eligible citizens in consultation with the legislative authority.
Bahrain has unveiled new strategic projects that will total more than $30 billion in investments, in addition to attracting foreign direct investment of up to $2.5 billion by 2023.
Public debt in Bahrain rose to 133 percent of GDP last year, compared to 102 percent in 2019, according to the data of the International Monetary Fund. Standard & Poor's expected Bahrain's public budget deficit to average by 5 percent from 2021 to 2024, compared to 16.8 percent of GDP last year, excluding the impact of a potential value-added tax increase.
Source (Asharq Al Awsat Newspaper, Edited)
