(MENAFN - Kuwait News Agency (KUNA)) WASHINGTON, May 30 (KUNA) -- Bahrain is projected to grow 3.2 percent in 2018, the International Monetary Fund said Wednesday.
"Overall growth is projected at 3.2 percent in 2018, with a recovery in oil production, continuation of GCC-funded projects, and rising refinery and aluminum production capacity. Announced fiscal policy would reduce somewhat the overall fiscal deficit, to 11 percent of GDP in 2018," according to Bikas Joshi, who led an IMF mission to Manama on April 30-May 15.
"Over the medium term, the deficit is projected to remain sizable, with a rising interest bill as public debt continues to increase. Without further measures, non-oil revenue is expected to stagnate and growth to slow," Joshi said in a statement.
According to the IMF, Bahrain's output remained resilient in 2017, growing at around 3.8 percent while inflation remains subdued.
"On the back of higher oil prices-increasing hydrocarbon revenues by 15 percent-and authorities' fiscal consolidation measures, the overall fiscal deficit is estimated to have declined to 14 percent of GDP, from around 18 percent in 2016," according to Joshi.
Public debt increased to 89 percent of Gross Domestic Product (GDP), while the current account deficit remained unchanged at 4.5 percent.
"The decline in oil prices since 2014 and absence of buffers have led to a rise in fiscal and external vulnerabilities. Notwithstanding notable measures implemented since 2015, a credibly large fiscal adjustment is a priority.
And while the banking system remains well capitalized and liquid, continued efforts to strengthen the regulation and supervision of the financial sector would further bolster the system, according to the IMF. (end) hy.mb