World Bank: Gulf Countries to Achieve Surpluses by 2019, Except Bahrain

2017-01-13 - 4:20 am

Bahrain Mirror: The World Bank expected that Bahrain's budget deficit in the next three years will continue, before it is reduced to around 0% of the Gross Domestic Product (GDP) by 2019.

However, other Gulf countries will be better off, as Saudi Arabia and the Sultanate of Oman, both of which suffer fiscal deficits at the moment, will be able to cover their deficit and achieve financial surpluses by 2019.

According to data and statistics by the World Bank in its Global Economic Prospects January 2017 report on the Middle East and North Africa, Oman will be able to cover its deficit by 2018, while Saudi Arabia will continue to record fiscal deficits in 2017 and 2018. Bahrain however, is expected to witness fiscal deficits in 2017 until 2019. 

The World Bank report said Bahrain's economic growth is expected to decelerate in 2017 to 1.8% in comparison with the 2% registered in 2016, before it starts to recover in the following two years.

The estimated budget deficit of 2015, according to Bahrain's final account, was around 14% of the GDP, around 1.7 billion Bahraini Dinars.

Moreover, the World Bank indicated in its report Bahrain's registered 2% decline in oil production, between January and November 2016, in comparison to the same period in 2015. Oil production represented 85% of the state revenues.

In regard to Middle East and North Africa in General, the report stated, "Growth in the Middle East and North Africa is forecast to recover modestly, to 3.1 percent in 2017 and to 3.3 percent in 2018 and 2019, with the pickup in activity strongest among oil importing countries (Figure 2.4.6). Growth in oil exporters is projected to rise at a slower pace, supported by an envisaged upturn in oil prices from an average of $43 per barrel in 2016 to $55 in 2017, $60 in 2018, and $63 in 2019 and unchanged conflict conditions. Continued rebalancing in the global oil market, as consumption rises and non-OPEC supply declines, will support the envisaged rise in prices."

The report also indicated that the Islamic Republic of Iran will register a 5.5% economic growth in the coming years, due to the enhancement of oil production and increase in foreign investments.

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