Bahrain’s Public Debt Reaches BD17.9 Billion: Finance Ministry Unveils Repayment Strategy

TDT | Manama
Email : editor@newsofbahrain.com

Bahrain’s public debt has reached BD17.9 billion, with interest payments for 2023 alone standing at BD843 million, according to the Ministry of Finance.

To address these rising obligations, the ministry has laid out a borrowing strategy aimed at lowering costs and ensuring repayments are carefully timed to avoid putting pressure on the country’s finances.

Annual assessments are conducted to determine the funds needed to cover the budget deficit and repay outstanding debts within the year.

Responding to a question from MP Khalid Buanaq, the ministry detailed its approach, which is built around two key initiatives: the Fiscal Balance Programme and the Economic Recovery Plan.

Revenues
These measures aim to improve government revenues by tapping into new income streams while reducing operational expenses.

The ministry is also working to improve the delivery of public services while maintaining steady growth in the local economy—a critical factor in creating financial surpluses that can be gradually channeled into reducing public debt.

The ministry pointed out that Bahrain’s reliance on borrowing stems from recurring budget deficits, as permitted by Article 6 of the State General Budget Approval Law.

This provision allows for loans from financial institutions as well as Arab and Islamic funds to cover shortfalls.

However, the ministry stressed that public debt cannot be assessed in isolation. It must be considered alongside Bahrain’s broader economic performance, which has been buoyed by an average GDP growth rate of 9 percent between 2021 and 2023.

State Account
Preparations are being finalized to present the final consolidated state account for 2024 to Parliament.

Meanwhile, debt repayments are managed through a mix of local and international markets, as well as financial surpluses when available.

The ministry stated that its debt management strategy remains firmly tied to fiscal policy and supported by ongoing economic reforms.

By keeping borrowing costs in check and encouraging economic growth, Bahrain aims to bring greater stability to its finances in the years ahead.