MP Al-Qarata: Government to Present New Decree to Raise Public Debt Ceiling to 12 Billion
2015-09-01 - 10:25 p
Bahrain Mirror: The Bahraini Member of Parliament Ahmed Al-Qarata said: "The government will present a new decree-law to the parliament to raise the public debt ceiling in order to open the door for more borrowing following the drop in oil prices and decrease of expected revenues to third after the international oil prices reached less than 40$ a barrel," predicting that the public debt would reach from 7 to 12 billion BD.
"The government is expected to make this move during the first half of next year (2016), and this might take place during April 2016," said Al-Qarata, adding that "the government currently has borrowed amounts of money that raised the public debt to 7 billion BD. These loans are to be spent until mid-2016, but after these loan amounts are used up, the government will be inclined to borrow more in order to fulfill its commitments that it announced in its current budget."
"The reality will prove that the government will have no choice but to face this deficit in the 2015-2016 budget with more borrowing," stated Al-Qarata, and that is because 86% of total revenues are from oil.
Al-Qarata also predicted that "the public debt will reach 12 billion BD by the end of 2018 if the financial situation remained as it is. The government currently received a decree-law that enabled it to borrow, raising the ceiling to 7 billion BD, and it will need to borrow 6 additional billion dinars during the coming three years, noting that the deficit officially recorded in the current budget amounts to 3 billion dinars, but it will exceed 4 billion if oil prices continue to dwindle."
It is noteworthy that Bahrain raised the debt ceiling to 7 billion by a royal decree, which the parliament was compelled to pass. Bahrain is suffering from a political crisis since five years ago, which adversely affected the economy as the oil prices dwindled across the world.
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