THE government has been urged to draw up a clear plan to reduce public debt by taking advantage of the surplus resulting from the rise in global oil prices.
A group of MPs – Jalila Al Alawi, Mohammed Al Refai, Hassan Al Asbul, Dr Hesham Al Ashiri, and Ahmed Qarata – has submitted a bill in this regard.
They claimed that the rise in crude oil prices could lead energy producers in the Middle East, including Bahrain, to reach the financial breakeven point, or even earn higher profits.
“There will be a large surplus especially since oil prices are much higher than the $60 per barrel cited as a benchmark in the budget,” they said, stressing the urgent need to reduce public debt and give a significant boost to the country’s economy.
In energy markets, crude prices rose yesterday. Brent, the benchmark for two-thirds of the world’s oil, was up by about 1.1 per cent at $84.24 a barrel. West Texas Intermediate, the gauge that tracks US crude, was up 1.1pc at $79.91 a barrel.
Parliament second deputy speaker Qarata had earlier submitted a proposal seeking to prevent public debt from exceeding, at any time, 60 per cent of the GDP.
The Finance and National Economy Ministry said, in its reply, that the total public debt as of December 2022, according to preliminary results, stands at BD16.7 billion, which is equivalent to 101pc of the 2022 GDP, which was initially estimated at BD16.6bn.
The total debt for the fiscal year 2021 was BD16.9bn, equivalent to 114pc of the GDP for the year, which amounted to BD14.8bn, according to a report in our sister paper Akhbar Al Khaleej.
Bahrain has since managed to achieve growth, driven by the improving economic indicators in 2022, in conjunction with the economic recovery plan, the ministry pointed out.
In an earlier GDN report, the Shura Council’s financial and economic affairs committee had also warned against a continuous increase in public debt.
Keeping public debt under control helps the kingdom strengthen its solvency and ability to honour all its obligations, it said in a report.
Bahrain’s public debt had reached BD10.731bn in December 2017, BD12.441bn in December 2018 and nearly BD13.6bn in December 2019.
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