Bahrain’s economy has recorded a contraction in the first quarter of this year due to pressures caused by oil prices and the Coronavirus pandemic.
Government data said that Bahrain’s economy shrank by 2.11% in the first quarter of this year, compared to a year ago.
According to the data, the non-oil economy contracted by 2.97%, and the hotel and restaurant sector declined by 20.44%.
The data indicated that the oil sector rose by 2.04% during the second quarter.
Bahrain’s GDP shrank 0.10% compared to the previous quarter, according to the data.
The country’s budget deficit rose to 18% of GDP last year, according to the International Monetary Fund (IMF).
Brent crude prices have increased by 35% since December, reaching nearly $70 a barrel, IMF said. This would help narrow the deficit gap to 9% this year, but it will still be one of the highest in the Middle East.
At the beginning of last April, government data showed that Bahrain’s GDP shrank by 5.81% during 2020 on an annual basis, under pressure from the pandemic and the decline in oil prices.
Fitch Ratings said that Bahrain needs a price of about $100 a barrel to achieve a balance in the 2021-2022 budget.
Last month, Bahrain extended a government support program for an additional three months for the sectors affected by the pandemic.
The government said that cinemas, recreational game centers, halls, sports clubs, cafes, barbershops, and kindergartens, are among the sectors benefiting from this program.
Last May, the Central Bank of Bahrain issued a circular to all retail banks and finance companies to provide the option of deferring loan installments for all individuals and companies.
The postponement is for an additional six months, ending on December 31, without calculating fees for deferment or an increase in the amount of the installment or an increase in the interest rate.
It should be noted that Bahrain reduced the permits of foreign workers during 2020, by 10% from the previous year, due to the cancellation and revision of the data of outdated domestic workers.