Bahrain Govít Refers Draft Law to Parliament Raising Limit on Debt to BD 13B

2017-06-20 - 5:28 am

Bahrain Mirror: Head of the Parliamentary Financial and Economic Affairs Committee Abdul Rahman Bu Ali said that the draft law the government referred to the parliament concerning the amendment on the debt law, suggests raising the bar on the state public debt from 10 billion BD to 13 billion BD.

The government head towards this approach to maintain the level of repetitive spending in the new 2017 and 2018 budgets, while revenues continue to decrease on the hand. This results in a deficit worth 2.55 billion BD, causing a continuous state need for loans to cover the deficit.

Although the government at the same time tends to refer a draft law to amend the Future Generation Fund law, to allow them to use parts of the fund to contribute to filling the deficit. This contribution, however, seems limited in light of the deficit inflation expected to occur in the budget, almost reaching 2 billion and a half BD. On the other hand, there are limited amounts in the reserve fund, a relatively newly established fund in 2006, and launched in 2007.

According to the final account report for the Future Generation reserve fund of last year (2016), the provide amount in the account is 615 million and 74 thousand dollars, approximately 232 million BD.

Al-Ayyam daily said that the government intends to withdraw 75 million BD only from the reserve fund to contribute to covering the expected deficit.

In the same context, the new budget shows that the public debt heads towards unprecedented levels, and might exceed 100% of the Gross Domestic Product (GDP) in case the proposed limit in the draft law is set at 13 billion BD. It is noteworthy that the GDP at the end of 2016 was 12.5 billion BD.

Arabic Version

 


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