Bahrain Records a Ground-breaking $88 Million Revenue Surplus in the First Half of 2022
Bahrain Records a Ground-breaking $88 Million Revenue Surplus in the First Half of 2022 :
Bahrain Records a Ground-breaking $88 Million Revenue Surplus in the First Half of 2022
Bahrain has recorded impressive records in the past year. Earlier this month, the Bahrainian government announced that it had surpassed its financial records for 2021. Bahrain recorded an exceptional $88 million revenue surplus in the year’s first half, amounting to a 52% increase from the country’s revenue in H1 2021.
In 2018, Bahrain launched an ambitious plan to balance its budget by 2022. Since then, the country has initiated numerous policies to cut budget deficits and regularise debt levels. However, the COVID-19 pandemic disrupted the plans. Bahrain’s economy mainly depends on oil sales revenue, so the oil price crash affected the country’s balance sheet. This situation resulted in the extension of the goal’s timeline to 2024.
Regardless of this extension, Bahrain has gotten significant help in its quest to balance its budget. For example, Bahrain received a package worth $10 billion from other gulf companies to balance the country’s fiscal obligations.
Bahrain’s current revenue surplus can be attributed to the numerous economic policies implemented by the government in recent years. According to Bahrain’s Minister of Finance and National Economy, Sheikh Salman bin Khalifa Al Khalifa, the current record results from the government’s disciplined resolve to maintain fiscal responsibility and achieve economic sustainability. The Minister further stated that the government intended to intensify its efforts by diversifying Bahrain’s revenue sources and attracting foreign direct investment.
However, apart from Bahrain’s fiscal responsibility, its recent VAT increase seems to have contributed to the country’s revenue increase. In December 2021, Bahrain increased Value Added Tax from 5% to 10%. VAT is the tax imposed on the sale of goods and services. The VAT increase took effect in January 2022. Thus, the first half of 2022 was the first time Bahrain recorded VAT revenues based on a 10% rate. This policy could have significantly increased its revenue records.
What is Next for Bahrain?
Despite Bahrain’s ground-breaking revenue surplus just recorded, the government seems to have just started. In 2021, Bahrain launched a $30 billion recovery plan. The recovery plan includes five pillars expected to boost Bahrain’s economic position. The pillars include developing specific sectors, simplifying commercial processes, creating jobs, establishing strategic projects, and maintaining financial stability. According to the Bahrainian government, they intend to create over 40,000 new jobs between 2022 and 2023.
Yet, Bahrain’s progress still seems to depend on how much oil prices fare in the global market. According to the International Monetary Fund, the Bahrainian economy is more likely to improve if oil prices increase in the worldwide market.
Conclusion
While the COVID-19 pandemic significantly affected Bahrain’s economy, the country has been recovering gradually. The current revenue surplus strongly indicates the country’s improving economic position. More importantly, it increases the probability that Bahrain will attain a fiscal balance in the coming years.
Last Updated on 9 months by News Editor
