BAHRAIN’S audit watchdog has sounded the alarm over a rapid rise in the country’s national budget deficit.
In a new report made public yesterday, the Administrative and Financial Audit Bureau said it was “concerned” that the deficit had reached BD8.9 billion by the end of last year and warned of negative economic implications.
That compares with BD4.2bn in 2012, meaning the deficit ballooned by 112 per cent in the space of four years.
The bureau said the deficit was equivalent to 36 per cent of the GDP in 2012, but the figure had risen to 71pc last year.
“We are concerned with the deficit level and can see that it will take a toll with negative implications for the financial and credit status (of Bahrain),” it said in the report for 2016-2017.
“The government resorted to borrowing to repay what it previously borrowed, besides other financial obligations, instead of spending it on funding development projects and programmes.
“Interest on loans of amounts borrowed by the government were BD150m in 2012 and by the end of last year reached BD362m, which is an increase of BD212m.
“There is no law tackling the management of the country’s deficit or controlling borrowing, with no maximum limit identified or considered to be acceptable.”
The bureau also highlighted BD14m that was overspent by government ministries, surpassing the allocated budget for recurrent expenditure last year.
However, it said despite this almost all ministries failed to spend at least half of their budget for projects.
“Ministries and government bodies didn’t spend their projects’ budget as initially projected,” it said.
“The lowest was the Supreme Council for Environment at 20pc, the Civil Service Bureau at 25pc and the Justice, Islamic Affairs and Endowments Ministry (justice directorate) at 26pc, and the highest was the Customs Affairs at 67pc.”
The 628-page report was presented to the National Assembly yesterday.