Is Our Economy Growing or Is It Our Debt?

2023-10-10 - 1:35 p

Bahrain Mirror (Exclusive): Following its session on October 2, the government released the quarterly economic report of the Kingdom of Bahrain for the second quarter of 2023. The report indicated that the country's economy experienced an overall growth of 2%.

However, this number alone is unlikely to rejuvenate the nation, alleviate the burdens of its people, or make a dent in reducing the public debt and its associated interest.

In fact, the government itself recently sought approval from the heads of the Shura Council, the Council of Representatives, and their members during a meeting held over a week ago. They requested an increase in the ceiling for public debt, aiming to borrow an additional billion dinars this year. Showcasing this urgency, the king has already issued a decree, which will be presented to the parliament for approval. It's worth noting that the parliament is scheduled to commence its new session early next week.

Adding to the concerning economic landscape are newly published figures on economic websites, revealing record-high levels of public debt interest. In 2022, Bahrain's public debt incurred an annual interest cost of approximately 737 million dinars (equivalent to 1.968 billion dollars). Presently, it stands at 766 million dinars and is projected to reach 788 million dinars next year. This represents a substantial inflation of the public debt, particularly alarming when considering that official statistics from the Ministry of Finance and National Economy, up until December 2022, pegged Bahrain's public debt at about 16.7 billion dinars (approximately $44.4 billion), equivalent to roughly 101% of the GDP. However, the government's final account submitted to Parliament indicates that the actual figure for Bahrain's public debt is 19 billion dinars.

This sharp increase in public debt in Bahrain can be traced back to widespread corruption within the government. This corruption has been highlighted in various international reports focusing on oversight and corruption within the country, including the 2022 Transparency International report, which ranked Bahrain at a lowly 68th position on its global index.

Bahrain heavily relies on its oil and gas sector, accounting for 63% of its total state revenues, according to official data.

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