What You Need to Know About Bahrain's 2025-2026 Budget

Daily Tribune

24-03-2025

Ahmed bin Salman Al Musallam, Speaker of the Council of Representatives, attended a crucial meeting held by the Financial and Economic Affairs Committee, which presented a comprehensive overview of the draft state budget for the fiscal years 2025–2026.
The session, aimed at briefing members of parliament (MPs) on discussions between the executive and legislative authorities, was also attended by Abdulnabi Salman Ahmed, First Deputy Speaker, and MP Ahmed Abdulwahed Qarata.
MP Ahmed Sabah Al Salloom, Chairman of the Financial and Economic Affairs Committee, emphasized the importance of MP involvement in the discussions. He noted that the meeting followed the Speaker's directive to ensure all MPs were fully briefed on the ongoing budget discussions. He called for active participation in shaping a unified vision, addressing key issues, and submitting proposals before the budget is sent for government approval.
Al Salloom expressed his appreciation for Speaker Al Musallam's efforts in backing parliamentary proposals and his dedication to national goals through the continued collaboration between both authorities. He praised the Speaker's commitment to advancing development under the leadership of His Majesty King Hamad bin Isa Al Khalifa and the guidance of His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince and Prime Minister.
The committee chairman also provided an overview of the joint meetings with the executive authority, which began on October 31, 2024, and continued through March 2025. A total of six sessions were held, during which the budget's strategic objectives and key sectoral projects were thoroughly reviewed. These included housing, education, health, infrastructure, and environmental sustainability, among others.
Key Principles of the 2025–2026 Budget:
No Increase in VAT: The draft budget confirms no rise in value-added tax (VAT), ensuring stability for businesses and consumers alike.
Pensioner Support: The budget proposes annual increases for pensioners by maintaining the 2023–2024 cost-of-living allowance and adding an increase for 2025–2026.
Government Services Development: The budget allocates BHD 800 million for housing projects, marking the largest-ever investment in housing services. This includes collaboration with the private sector to expedite housing allocations and reduce waitlists.
Education Sector Investment: Plans include employing more Bahraini professionals, updating curricula, expanding educational services, and supporting the construction of schools in new housing areas.
Healthcare Enhancements: A BHD 688 million allocation for healthcare aims to improve services for both citizens and residents.
Employment and Labour Initiatives: The budget outlines the creation of 25,000 new jobs annually, including initiatives to hire 8,000 fresh graduates each year. The Labour Fund (Tamkeen) will support 50,000 Bahrainis annually through funding and training programs.
Spending Efficiency: The budget sets a target to reduce recurrent expenditures by at least 5%, focusing on increasing efficiency across ministries and government bodies.
Direct Support for Low-Income Citizens: Provisions are included to provide direct cash support to low-income citizens if the prices of subsidized goods are adjusted during the budget period.
Legislative Package for Fiscal Improvement: A new legislative package aims to bolster the fiscal status by generating additional revenue from companies with substantial annual profits. This includes increased revenues from taxes on energy drinks, soft drinks, sweetened beverages, and tobacco, as well as carbon emissions fees.
Infrastructure Sustainability: Emphasis will be placed on enhancing infrastructure sustainability and exploring opportunities for the development of idle commercial and investment land.
Deficit Reduction: The budget seeks to explore various options to reduce the fiscal deficit and ensure the adequacy of funding during the budget implementation period.
In closing, Al Salloom extended his gratitude to all members of both authorities and the working teams for their continuous cooperation and dedication to serving the Kingdom and its citizens.
This budget draft aims to drive sustainable development while balancing the needs of key sectors, ensuring Bahrain's economic growth continues in line with its national goals.