IMF: Bahrain’s economy on strong footing, expanded by 4.9% in 2022

IMF: Bahrain’s economy on strong footing, expanded by 4.9% in 2022

MANAMA: Bahrain’s economy is on a strong footing as it grew at its fastest pace in a decade since 2022, driven by continued fiscal reforms and improved finances amid higher oil prices, the International Monetary Fund said. The kingdom’s economy, which expanded by 4.9 per cent in 2022, spurred by a 6.2 per cent surge in non-oil gross domestic product, is projected to moderate to 2.7 per cent in 2023, the IMF said in a statement at the conclusion of Article IV consultations with Bahrain. Non-oil GDP this year is expected to moderate to 3.3 per cent, reflecting “fiscal consolidation, higher interest rates, and a base effect from 2022 strong growth.”

The overall economic growth is projected to stabilize at about 2.7 per cent over the medium term. However, “significant uncertainty clouds the forecast, including from oil price volatility, international financial turmoil and ongoing tightening, and a slowdown in global growth,” the Washington-based fund said. Bahrain, the smallest economy in the six-member GCC economic bloc, has bounced back strongly from the pandemic-induced slowdown, driven by robust growth in its non-hydrocarbon economy. The non-oil sector’s contribution to real GDP reached an all-time high at 83.1 per cent last year.

Higher oil prices following