Latest news with #BD16bn
Daily Tribune
03-05-2025
- Business
- Daily Tribune
MPs set to debate public debt hike to BD18 bn
Lawmakers will next week debate two emergency decree-laws that would raise Bahrain's public debt ceiling—first to BD16 billion, then to BD18bn— to give the government more financial flexibility in tackling budget shortfalls and maturing repayments. The first, Decree-Law No. 13 of 2023, proposes amendments to Bahrain's 1977 law on development bonds. If approved, it would authorise the Finance Minister, in coordination with the Central Bank, to issue treasury bills, Sharia-compliant instruments, and other borrowing tools both domestically and abroad, within a BD16bn cap. Instruments could be issued in Bahraini dinars or other convertible currencies and reissued upon maturity. Parliament's Financial and Economic Affairs Committee first reviewed the law in early 2024, but MPs returned it for further study. A revised report is now set for discussion, after the Finance Ministry warned of a growing gap in financing needs for 2023 and 2024, driven by over BD4bn in debt and interest repayments. By September 2023, Bahrain's oil revenues stood at BD1.43bn, with public debt exceeding 103% of GDP. The Finance Ministry argued that the new language—particularly the term 'other credit facilities'—modernises the law to reflect tools used by today's financial markets, enabling Bahrain to manage mounting liabilities and adapt to global interest rate volatility. Although Decree-Law 13 was passed in 2023, it has not yet received final parliamentary ratification. Meanwhile, a second measure—Decree-Law No. 10 of 2024—was issued in August, further lifting the cap to BD18bn. It took legal effect immediately after being published in the Official Gazette, but is also awaiting parliamentary sign-off. The committee evaluated the second decree across five meetings between October 2024 and April 2025, studying financial records, legal input and responses from the Finance Ministry. Its final report, submitted on April 20, found the move legally sound under Article 38 of the Constitution, which permits temporary legislation by royal decree when Parliament is in recess. Bahrain ran a budget deficit of BD774 million in 2023 and expects this to increase to BD904m in 2024—nearly BD1bn above initial budget estimates. According to the Finance Minister, Shaikh Salman bin Khalifa Al Khalifa, contributing factors include BD1bn in unpaid gas bills by the Electricity and Water Authority, overspending on social welfare, and delayed support payments under the Fiscal Balance Programme. The Central Bank confirmed the move fell within budget law provisions. Officials warned that without legal approval for the new debt ceiling, the government could face constitutional challenges in meeting its obligations. Under the BD18bn cap, bonds and similar instruments can be reissued as they mature, provided total borrowing remains within the approved limit.
Zawya
26-03-2025
- Business
- Zawya
Bahrain: Borrowing cap set to be increased to $59.69bln
Bahrain's borrowing cap is set to be increased to BD22.5 billion from the current limit of BD16bn. The decision comes as the country's total debt surpassed the existing limit by BD1.9bn, reaching BD17.9bn by the end of last year. The amendment to the 1977 Bonds Law, which will now be reviewed by the Shura Council, was approved by 33 MPs and rejected by six others during the Parliament session yesterday. One MP failed to attend the proceedings. Finance and National Economy Minister Shaikh Salman bin Khalifa Al Khalifa acknowledged the financial strain following the proposed increase in borrowing, however, he emphasised that economic stability and the well-being of citizens remain the government's top priorities. 'The economic dynamics and people's standards of living are much more important,' he said. 'We will explore options that are effective and consider them later on with legislators. For now, we don't need to stall the 2025-2026 national budget,' he added. One of the key outcomes of discussions around the rise in borrowing is an agreement not to increase VAT, or remove subsidies on essential services such as electricity, water, and fuel –at least for now. Parliament's financial and economic affairs committee chairman MP Ahmed Al Salloom expressed gratitude to the government for its approach, stating that a balance between economic reforms and public welfare must be maintained. 'I thank the minister for listening to people and averting a catastrophic outcome on living standards and life in Bahrain,' Mr Al Salloom said. However, he added that while Bahrain has been investing in economic diversification and infrastructure projects, the reliance on borrowing remains a pressing concern. 'The focus should now shift to legislative discussions and economic policy adjustments that could help address the debt issue without burdening citizens with additional taxes or subsidy cuts,' he added. While the increase in borrowing is seen as necessary for short-term financial stability, a few legislators alleged that inefficiencies in government spending have led to rising debt. MP Dr Abdulhakim Al Sheno criticised the country's large administrative structure, arguing that reducing the size of the government could help control spending. 'The problem is simply an exaggerated number of ministries, government bodies, and agencies. We have an enlarged administrative structure that needs to be shrunk,' Dr Al Sheno said. He also questioned the contribution of state-owned companies, which currently provide BD40 million to the national economy. 'Do we need to borrow if those companies contribute to the economy properly?' he asked. According to the approved budget, the total spending for this year and the next will be BD8.916bn, divided into BD4.379bn this year and BD4.536bn the next. A total of BD550m will be spent on projects, divided equally into BD275m each year. The government is anticipating general revenues of around BD6.383bn – BD2.924bn this year and BD3.459bn the next. A total of BD37.234m is expected to be transferred to the Future Generations Fund from exported oil barrels – BD18.703m this year and BD18.531m the next. Copyright 2022 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (
