Covid response praised by IMF

Bahrain has been commended by the IMF for its adept policy response to the Covid-19 pandemic, which mitigated the health and socio-economic impact on the country.

The international financial institution comprising 190 member countries said yesterday that the Bahrain government’s support package provided relief to the private and banking sectors, helping to contain job losses and corporate strains.

The IMF statement follows the completion of the 2022 Article IV Mission to the country, led by the institution’s deputy division chief Asmaa El Ganainy.

During an Article IV consultation, an IMF team visits a country to assess developments and discuss economic and financial policies with government and central bank officials.

“Bahrain implemented a commendable pandemic policy response, which successfully mitigated the health and economic impact of the Covid-19 crisis. The strong vaccination campaign, which covered all residents, was one of the fastest globally, and allowed the broad reopening of the economy in summer 2021. The support package provided relief to the private and banking sectors, helping to contain job losses and corporate strains,” said Ms El Ganainy at the conclusion of the visit.

“A gradual post-Covid recovery is underway, while the renewed fiscal reform momentum and high oil prices are mitigating Bahrain’s fiscal and external vulnerabilities.”

The statement notes that Bahrain’s economy grew by 2.2 per cent in 2021, driven by 2.8pc growth in non-hydrocarbon GDP while hydrocarbon GDP contracted by -0.3pc.

The recovery was supported by a strong performance in non-hydrocarbon manufacturing as well as by the retail trade and hospitality sectors.

Inflation measured by the consumer price index remained negative at -0.6pc on average in 2021.

Ms El Ganainy said the IMF expects Bahrain’s GDP growth will accelerate to 3.4pc in 2022, with non-oil GDP increasing by 4pc driven by stronger manufacturing and the full reopening of the economy. The economic expansion is seen stabilising at around 3pc over the medium term.

However, as with the world at large, the forecast is clouded by uncertainty stemming from the evolution of the pandemic and the war in Ukraine, as well as the global inflation outlook.





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