Bahrain Records Highest Debt Reaching 54% of GDP

2015-09-30 - 11:50 p

Bahrain Mirror: A report issued by Kamco Investment Company indicates that "Bahrain has recorded the highest rank in terms of public debt, as it reached 54%. Qatar, however, came in the second rank with 28.9%", reported Al-Wasat newspaper.

The company pointed out in its report entitled "The GCC Economic Performance" issued in September 2015, that despite the drop in oil prices, the Gulf Cooperation Council states are still the major stirrer for economic growth in the Middle East and North Africa region, as the GCC economic growth rate exceeded the other rates in MENA.

Kamco expected that the decrease in the value of exports in the GCC will negatively affect the current account in the gulf, which is expected to deteriorate from USD 271.8 billion in 2015 about 16.5% of the gross domestic product to USD 40.2 billion in 2015. Saudi Arabia, Oman and Bahrain are expected to witness a deficit in the current account during 2015.
The report expected that the rate of global economic growth will decrease in comparison with the previous estimations. In its

last report about the global economic prospect, the international monetary fund decreased its expectations for the global economic growth to 3.3% in comparison with its previous expectations at 3.5% in 2015. Meanwhile, it expected that the growth rate will reach 3.8% in 2016 and that it will rise to 3.9% in 2018.

The drop in oil prices has led the Gulf States to reconsider its massive spending plans, as its investments will be in the infrastructure and will be restricted to the strategic projects. It is also expected that some investment programs be delayed. Saudi Arabia and Abu Dhabi vowed to decrease some of their investments in the near future. The low oil prices will be a chance for the states that export oil in MENA to implement more serious policies in order to push its non-oil sector.

The financial situation of the Gulf States has become weak, due to the rapid pace of expenditure growth in a rate that exceeds the revenue growth. On the other hand, it is expected that Oman and Bahrain witness a rise in the oil par rate. It is to note that Kuwait recorded the least oil par rate.

The risks caused by the geopolitical tensions in Yemen may cause internal unrest and would postpone implementing the infrastructure developing plans.

Fitch rating expected that the future expectations for the Saudi economy will be an alarm bell to the economies of the whole region.

In addition, the slow economic growth in China may affect the global economic rates. In case the growth rates deteriorate, the demand on oil will be severely affected.

Arabic Issue 


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