IMF urges Bahrain to implement further fiscal reforms

      Published on Saturday, 2 September , 2017      76 Views     
IMF urges Bahrain to implement further fiscal reforms


Bahrain needs to urgently implement further fiscal reforms as economic vulnerabilities have increased in the Gulf kingdom in the wake of the oil price decline, according to the International Monetary Fund (IMF).

IMF executive directors said that, although economic activity and financial market conditions have remained positive, “additional sizable and frontloaded fiscal adjustment is urgently needed”.



They said in a new research note that sustained fiscal efforts will be needed over the medium term to put debt on a downward path and rebuild policy space.

Directors recommended measures to contain current expenditure, including the wage bill and further reducing energy subsidies, while raising non-oil revenue, including through the VAT and exploring other revenue measures.

They stressed the importance of minimising the adverse impact of these measures on vulnerable groups. Directors encouraged authorities to put in place a comprehensive fiscal financing and debt management strategy to mitigate risks, and welcomed recent steps to establish a public debt management office.

The IMF said Bahrain’s overall GDP grew 3 percent in 2016, supported by strong growth of 3.7 percent in the non-oil sector aided by the implementation of GCC-funded projects.

Average inflation remained moderate at 2.8 percent while bank deposit and private sector credit growth slowed.

Despite the implementation of significant fiscal adjustment, lower oil prices meant that the overall fiscal deficit reached nearly 18 percent of GDP and government debt rose to 82 percent of GDP. The current account deficit widened to 4.7 percent. International reserves have also declined.

The IMF said real GDP growth is expected to slow to 2.3 and 1.6 percent in 2017 and 2018, reflecting the ongoing fiscal consolidation and weaker investor sentiment.

The fiscal deficit is projected to improve to 12.2 percent of GDP in 2017 owing to higher oil prices and continued reduction in spending. Over the medium term, the fiscal deficit is projected to narrow only slightly because of rising interest payments that offset some of the revenues from the planned implementation of the VAT, the IMF added.



Directors agreed that the exchange rate peg remains appropriate for Bahrain, noting that it has delivered monetary policy credibility and low inflation.

Keywords:
Category Bahrain, Gulf News | 2017/09/02 latest update at 11:44 PM
Source : | Photocredit :
77 Views
Comments Add comment



Related Articles

The editorial staff of Saudi Arabia Today would like to give all of its readers from Gulf and Saudi Arabia and the whole world the opportunity to participate actively in the development of the website! If you have something interesting, fun, scandalous - just something worth to be seen from more people. Capture it and share it in the Saudi Arabia Today with a short text.

Do you have information you want to reach our readers?

Send article/s

You can subscribe to our Facebook, Twitter and Google pages or use our RSS feed channel to always read the most important news about Saudi Arabia, the Gulf and the world.


Sponsored Publications



Saudi Alhokair’s mall unit files for IPO, offering in second quarter: sources
Saudi Arabia Saudi Arabia news

Saudi Alhokair’s mall unit files for IPO, offering in second quarter: sources

Saudi Arabia’s Fawaz Alhokair Group plans to offer shares in its shopping malls business in Riyadh in the…

Saudi Arabia new rules

Property prices continue to fall in key UAE markets

UAE banks invest Dh87 billion in Saudi Arabia, Egypt

King Salman receives dignitaries in Riyadh King

King Salman receives dignitaries in Riyadh

The Kingdom’s Grand Mufti Sheikh Abdul Aziz Al-Asheikh, senior scholars, ministers and a group of citizens called on…

Saudi King Salman reshapes country’s political and security affairs council King

Saudi King Salman reshapes country’s political and security affairs council

Saudi King Salman on Thursday announced a new list of appointees to key positions in the country’s political…

Saudi Arabia’s Prince Talal bin Abdulaziz has died King

Saudi Arabia’s Prince Talal bin Abdulaziz has died

Saudi Arabia’s Prince Talal bin Abdulaziz passed away on Saturday, family members and Saudi media said on Twitter.…

Bahraini crown prince meets Saudi officials in Riyadh King

Bahraini crown prince meets Saudi officials in Riyadh

Bahrain Crown Prince Salman bin Hamad Al-Khalifa held talks with Saudi officials in Riyadh this week. His visit…

GULF TV

Popular in GULF TV

PIRELLI “DREAMING” – THE CAL 2019 making of Full Version | Fashion Channel

1898 Views

A photographic tale of the aspirations of four women and their determination to achieve their goals, each one…

Latest videos in GULF TV

Events

Lifestyle

Culture

Sport

Science & Technology

Government