Oil’s contribution ‘highest to GDP’
MOVES to diversify revenues have proven successful as the oil and gas sector now contributes 20 per cent of the country’s gross domestic product (GDP), Finance and National Economy Minister Shaikh Salman bin Khalifa Al Khalifa told Shura Council members yesterday.
However, the sector’s contribution to the state coffers was still the highest, he added.
The remarks came as the upper chamber of the National Assembly was discussing the 2019 closing budget and financial statements, which was then approved unanimously.
“We have succeeded in diversifying the economy, but still more needs to be done,” said the minister.
“The matter is being addressed and we are working on multiple options towards achieving this goal.
“Oil and gas now stand at 20pc of the GDP, but they still make up our largest revenues.”
Shaikh Salman pointed out that as the state coffers continue to be in deficit, borrowing is a must.
“We are now more keen on striking a balance between revenues and spending, and we are working along with legislators on plans, programmes and initiatives that will enable us to strike that necessary balance.
“However, in this exercise services offered to the public are not being affected, and neither are low-income families.”
Shaikh Salman said that the economic recovery plan announced earlier would help reach the necessary balance between spending and revenues, whilst achieving revenue diversification.
“Including the private sector in future plans and easing trade and commercial procedures will certainly allow a quicker rebound.
“Injecting more revenues from state-owned companies towards the national budget is an integral step towards our recovery plan.”
The early voluntary retirement scheme had minimal effect in 2019, said Shaikh Salman, adding that the scheme proved successful as many Bahrainis who left their government jobs are now running successful businesses that have benefited the economy.
“The effect is continuous and spending on wages and allowances will be much different in the closing 2020 and 2021 financial statements that are set to be referred to the legislators,” said Shaikh Salman.
Shura financial and economic affairs committee chairman Khalid Al Maskati said all recommendations presented by legislators needed to be given the utmost attention, which Shaikh Salman said would be reflected in the upcoming adjusted statements.
Parliament has been rejecting the closing statements since 2007 in protest over what they describe as hidden spending.
