HM King approves budget

His Majesty King Hamad bin Isa Al Khalifa yesterday showed a green light to the Kingdom’s General State Budget (2019 to 2020). The move, as per law 11/2019 issued by His Majesty the King, follows approvals by the Shura and Representatives Councils. Earlier this month, the Shura and Representatives Councils members gave approvals to the restructured budget after two months of discussions and making several amendments including raising the revenues of nine government departments and revising upwards its budget deficit forecasts for the next two years.

Updated forecasts included within the budget demonstrate the government’s deficit reduction programme is well ahead of schedule, with a primary budget surplus forecast for 2020.  A projected 2018 budget deficit of 9.8 per cent of GDP has fallen to 6.2pc of GDP, a fall of over a third, places the Kingdom on track to deliver a balanced budget in line with the Fiscal Balance Programme announced in October of last year. The State Budget Law projects further reductions in the budget deficit to 4.7pc in 2019 and 3.9pc in 2020.

Preliminary figures indicate that the Bahraini economy has made a strong start to the year, with robust growth in several sectors during Q1 2019. With growth gradually strengthening across the region, Bahrain has benefited from increased positive spillovers in areas such as tourism and trade. Other positive indicators include growth in imports and exports, business loans, and building permit approvals. “The deficit is down by over a third and early indicators show robust GDP growth in the first part of this year,” said Bahrain’s Minister of Finance and National Economy, Shaikh Salman bin Khalifa Al Khalifa.

Following a consensus reached earlier this, it was announced that the deal calls for adding the revenues of the Oil and Gas Holding Company (Nogaholding) to the budget, on the basis BD56.4 million for each fiscal year. Mumtalakat Holding Company, the sovereign wealth fund of the government of the Kingdom of Bahrain, will also increase its contribution to the state budget up by BD10m for each fiscal year to reach BD30m. Agreements were also reached to increase the revenues of eight state departments.

As per a proposal, these include the National Health Regulatory Authority (BD1.5m); Youth and Sports Ministry (BD3.5m); Information Affairs Ministry (BD900,000); Urban Planning Authority (BD 1m); Works, Municipalities Affairs Ministry’s court (BD2m). The non-oil revenues in the budget will stand at BD71142066 for the fiscal year 2019 and BD72742112 for the fiscal year 2020.

Regarding recurrent expense, the Government agreed to increase social aid by BD55.513m for each fiscal year. The budget of the Ministry of Information Affairs will be increased by BD600,000 for 2019 and BD1.2m for 2020. The housing allowance will also be boosted by BD4m for each fiscal year, the Sunni and Jafferi Endowments by BD57.796m (2019) and BD58.473m (2020).