Bahrain economy set for 3% growth on key reforms, high oil

Bahrain economy set for 3% growth on key reforms, high oil

Bahrain’s economic activity is set for a moderate rebound in 2022 and the fiscal and external positions will improve considerably in the near-term and over the medium-term, growth is set to stabilize at 3%, according to a review by International Monetary Fund (IMF).

A gradual post-Covid recovery is underway, while the renewed fiscal reform momentum - with the recent doubling of the VAT rate to 10% and high oil prices - are mitigating Bahrain’s fiscal and external vulnerabilities, stated the Executive Board of the IMF in its conclusion of the Article IV consultation with Bahrain.

Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies.

On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

In this report, IMF stated that the Bahraini economy grew by 2.2% in 2021, driven by 2.8% growth in non-hydrocarbon GDP.

The recovery was supported by a strong performance in non-hydrocarbon manufacturing as well as by the retail trade and hospitality sectors.

With the economic recovery and higher oil prices, the state