Bahrain posts first-half surplus of $88m

The positive mid-year financial report indicates Gulf nation's post-Covid financial recovery

Bahrain posted a surplus of $88 million in the first half of the year, while recording a 52 per cent annual jump in revenue, the Gulf nation’s Ministry of Finance and National Economy said on Monday.

The country’s revenue in the January-June period stood at almost 1.7 billion Bahraini dinars ($4.5bn), from 1.1bn dinar in the same period last year.

Total surplus for the semi-annual closing reached 33m dinar from a deficit of 520m dinar in the same period in 2021.

The country’s actual expenses in the first half reached 1.6bn dinar, almost 2 per cent more than the prior year period.

With Bahrain's economy posting a strong 5.5 per cent growth in the first quarter of the year, the mid-year financial report is a further indication of the kingdom’s post-Covid-19 financial recovery, the ministry said.

“These results are clear evidence that the government’s disciplined approach to fiscal responsibility and long-term sustainability is proving effective. Government initiatives to further diversify the economy and attract investment are having a positive impact,” Sheikh Salman bin Khalifa Al Khalifa, Bahrain’s Minister of Finance and National Economy, said.

“While today is an opportunity to acknowledge measurable progress, Bahrain will continue to develop innovative policies to enable private sector growth and support the kingdom’s entrepreneurial spirit.”

Bahrain's economy, the smallest within the six-member GCC bloc, has sought ways to cut spending and achieve a balanced budget by 2024.

In 2018, the country received a $10bn package from its Gulf neighbours to support its Fiscal Balance Programme.

The country aims to have a balanced fiscal budget sooner than expected due to higher crude prices, Mr Al Khalifa told The National earlier this year.

Higher oil prices could help Bahrain to press ahead with its ambitious reforms, diversify its economy and reduce debt, the International Monetary Fund said in May.

Favourable macroeconomic and financing conditions can strengthen its finances, boost its foreign exchange reserves and support the dinar's peg to the US dollar, the fund said.

Bahrain also unveiled a major economic reform plan last year that seeks to invest about $30bn in projects to drive post-coronavirus growth, boost employment for citizens and attract $2.5bn in foreign direct investment by 2023.

The government also adopted cost rationalisation measures, including increasing value-added tax to 10 per cent to help the kingdom to balance its budget by 2024.