Bahrain witnessed a growth rate of 4.9% in its GDP in the year 2022. The non-oil GDP of the country also increased by 6.2%.
The growth rate of the non-oil sector surpassed the 5% target set in the government’s economic recovery plan initiated in 2021 to address the pandemic’s impact. It stands as the highest growth rate achieved in the past decade. The ministry also claimed that the financial estimates of February showed Bahrain’s deficits drop by 85%.
A reason for the country’s best phase of growth is the contribution of the financial services sector, accounting for 17% of its GDP. This is an additionally good sign for Bahrain given that the economic growth of the whole of GCC is expected to slow down to 2.5% in 2023 because of lower oil and gas revenue.
Bahrain’s five year economic recovery plan of 2021 truly helped it achieve this feat. It is in consonance with the country’s goals of 2030 and its intention to achieve net zero in 2060. This plan comprises the following factors: New labour market reforms, Regulatory reforms, Strategic projects plan, Priority sectors plan and Fiscal Balance Program Update.
Minister of Finance and National Economy, Shaikh Salman said that “We are now on the right track to implement all its plans, programmes and priorities aimed at supporting economic growth and advanced development paths.” He also highlighted the kingdom’s dedication to implementing the Fiscal Balance Programme, with the goal of achieving financial equilibrium between spending and income by 2024. This commitment aims to foster financial sustainability and promote economic growth.
“Bahrain experienced strong growth in 2022, in line with other GCC countries. With the economic recovery well under way, ongoing fiscal reforms, and higher oil prices, the state budget deficit declined significantly, narrowing to 1.7 percent of GDP in 2022, from 6.8 percent in 2021, while the overall fiscal deficit declined from 11.6 to 6.1 percent of GDP. Government debt declined to 117 percent of GDP in 2022 from 126 percent of GDP in 2021″, said Ms. El Ganainy of the International Monetary Fund (IMF) mission.
