Bahrain’s economy grows 5.7% in second quarter of 2021

TDT | Manama

The Daily Tribune – www.newsofbahrain.com

The preliminary results of Bahrain’s economic performance during the second quarter of 2021 have indicated that the real GDP grew by 5.7% on an annual basis.

It reflects an improvement in the economy and the success of national efforts to mitigate the coronavirus (COVID-19) pandemic repercussions.

The nominal GDP increased by 20.7% compared to the same period in 2020, supported by growth in the non-oil sectors of 12.8%.

According to a Cabinet statement issued yesterday, Bahrain’s economy contracted by 2.11% in the first quarter of the year, compared to what it was a year ago, due to the decline in the non-oil economy amid the imposition of COVID-19 restrictions for most of the quarter.

The non-oil economy contracted in the first quarter by 2.97%, the hotel and restaurant sector declined by 20.44%, and the oil sector grew by 2.04%.

A report by the International Monetary Fund (IMF) indicated that the recovery of Bahrain’s economy from the COVID-19 pandemic will be gradual, expecting a growth of 3.3% during the current year 2021, after a contraction of 5.4% in 2020.

The Cabinet approved a memorandum to review constitutional and legal procedures to refer a draft law amending some provisions of the Value-Added Tax (VAT) law to the legislative authority.

It includes an amendment to the value-added percentage starting from 1 January 2022.

It is part of a memorandum by the Ministerial Committee for Financial and Economic Affairs and Fiscal Balance approved by the Cabinet regarding a review of the performance of the Fiscal Balance Programme since its launch in 2018.

Also to be reviewed is the impact of the pandemic on the financial and economic situation, as well as the options studied to achieve a fiscal balance between government expenditures and revenues.

The Cabinet commended the role of the legislative authority in maintaining social support for eligible citizens and stressed the importance of continuing to work together to enhance financial stability.

Also approved was a memorandum by the Minister of Finance and National Economy regarding the Kingdom of Bahrain’s logistics plan, which includes the strategic objectives of the sector, and the plan for air cargo at Bahrain International Airport, and the launch of a global sea to air hub in the Kingdom of Bahrain.

The Cabinet reviewed a memorandum by the Finance Minister regarding the quarterly economic report for the second quarter of 2021, which outlined the Kingdom’s ability to return to pre-pandemic economic and financial progress. Several memorandums were approved such as the following:

1. A memorandum by the Government Executive Committee on the progress of the programs implemented within the Government Priorities Framework up to September 2021, and the execution plans for projects within its third edition, which aim to achieve financial sustainability and secure an environment that supports development.

2. A memorandum by the Ministerial Committee for Legal and Legislative Affairs concerning four MoU’s between the Kingdom of Bahrain and the State of Israel.

The MoU’s aim to strengthen bilateral cooperation in the fields of sports, innovation and development in water resources, environmental protection, nature & habitat conservation, medical services and research.

3. A memorandum by the Ministerial Committee for Legal and Legislative Affairs on granting the State of Israel sovereignty over their data stored in Bahrain on the Provision of Cloud Computing Services to Foreign Parties.

4. A memorandum by the Minister of Industry, Commerce and Tourism regarding the recognition of several countries as global partners for the global sea to air hub launched in the Kingdom of Bahrain, allowing companies based in these countries to apply for accreditation as authorised operators of this service.

The benefits of the service include transporting cargo between sea and airports in no more than two hours, enhancing shipping speeds and reducing competitive costs.

5. A memorandum by the Minister of Works, Municipalities Affairs and Urban Planning regarding the sea reclamation line within the Nabih Saleh Island.

The Cabinet reviewed the following topics:

1. A memorandum by the Minister of Health regarding the achievements of the National Committee to Combat Chronic Non-Communicable Diseases for the years 2017- 2021.

2. The Cabinet took note of the reports of the Ministers on the results of the participation in the seventh meeting of the Council of Ministers of Labour and Council of Ministers of Social Affairs in the GCC, and the signing of the agreement to organise the Bahrain International Air Show 2022-2024 and participation in the DESI exhibition in London.