A TOP World Bank official has praised Bahrain’s monetary policies and sees it posting a three per cent growth this year.
An increase in growth and an expected drop in deficit is to continue thanks to the success of the government plans, World Bank’s Regional Director of the GCC, Middle East and North Africa Issam Abousleiman told our sister paper Akhbar Al Khaleej yesterday.
With the ease in Covid restrictions helped by a rapid vaccination rollout, 2022 is expected to be even better, he said.
Mr Abousleiman said fiscal and external deficits are expected to narrow, reversing their expansion observed in 2020. Debt to GDP ratio will remain above 130 per cent during the forecast period, highlighting the priority of fiscal adjustment to put debt on a downward path.
He said that the World Bank’s Economic Update for October 2021 indicates that “preliminary official data reveals that the economy contracted by 2.1pc year on year in the first quarter 2021, compared with the 5pc contraction in 2020.
The rebound is driven by the recovery of the oil sector, which grew by 2pc year on year in Q1-21, he said. This recovery outperformed the slowdown in the non-oil sector, down by 3pc in Q1-21, as containment measures and travel restrictions hit hard services and tourism sectors where Bahrain has heavily invested.
Economic growth will rebound by the end of the year with the increase in the production of hydrocarbons and easing of Covid-19 closures.
The hydrocarbon GDP is estimated to recover reaching almost 1pc growth in 2021.
Non-hydrocarbon GDP is forecast to accelerate to almost 4pc in 2021.
The swift rollout of 5G services last January coupled with a robust digital infrastructure in e-commerce and ICT sectors are likely to be important drivers of growth going forward.
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