Bahrain sees higher oil helping it beat budget balance target

Bahrain, one of the countries in the Gulf, is optimistic that it could beat its target to balance the budget by 2024 as higher oil prices and an economic rebound boost government coffers, according to the country’s finance minister.

“I’m optimistic about hitting the fiscal balance plan ahead of schedule,” Sheikh Salman bin Khalifa Al Khalifa told reporters on Sunday. “Higher oil is one part of that, the other is we are seeing economic growth coming back strongly and non-oil revenue is an increasing part of our revenue mix.”

Bahrain received a $10bn financial aid package in 2018 to help it cope with high debt levels and budget deficits. The International Monetary Fund estimates Bahrain needs oil prices of around $107 a barrel to balance its budget.

As part of the financial support from richer neighbouring nations including Saudi Arabia, the country outlined plans to balance the budget by 2022. But last year it pushed back that target because of the impact of the coronavirus pandemic on its economy.

The government also doubled value added tax to 10 per cent at the beginning of this year as part of its plans to boost non-oil revenue.

Bahrain would continue to look at international bond sales “when the time is right,” and would be “opportunistic” in tapping the market again, Sheikh Salman said, declining to be more specific.

“We’ve been very disciplined about approaching the market twice a year and will continue to maintain discipline around our borrowing,” he said.