Bahrain to eliminate budget deficit by 2022

The government yesterday announced a comprehensive package of reforms to secure the Kingdom’s longterm fiscal stability. The newly-announced Fiscal Balance Programme - the product of a far-reaching spending review conducted across all government departments - will see the country’s budget deficit eliminated by 2022, with the aim of delivering annual fiscal savings of BD800 million. This programme builds on the previous fiscal consolidation efforts, where initiatives implemented during the period of 2015-2017 yielded annual fiscal savings amounting to BD854m.

The measures also include the establishment of a series of new units designed to monitor spending, streamline processes, enhance transparency and increase efficiencies across government. These include the establishment of internal audit and central government procurement units within the Ministry of Finance, and a new debt management office. To support the funding requirements of the Fiscal Balance Programme, a financial support agreement worth US$10 billion was signed between Bahrain and Saudi Arabia, the United Arab Emirates and Kuwait.

Speaking at the announcement Bahrain’s Deputy Prime Minister, Shaikh Khaled bin Abdulla Al Khalifa, Chairman of the Ministerial Committee for Financial Affairs, said: “Today’s announcement demonstrates our commitment to putting the government’s finances on a solid and sustainable footing.” “Our Fiscal Balance Programme combined with the Financial Support Agreement from Saudi Arabia, the UAE and Kuwait allows for a swift and achievable consolidation Program that balances fiscal sustainability with continued economic growth and prosperity.”

Bahrain’s Minister of Finance, Shaikh Ahmed bin Mohamed Al Khalifa said: “With spending reductions commencing in the short term and the target of eliminating the budget deficit by 2022, the Programme secures the foundations of an economy that affords even more opportunity, more jobs, and greater living standards for the Kingdom’s generations of today and tomorrow.”