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Bahrain’s Future Generations Fund makes $44mn in profit in 2020

Bahrain’s Future Generations Fund

Bahrain’s Future Generations Reserve Fund (FGF) achieved profits during the fiscal year 2020 of about $44 million.

FGF achieved an annual return on average investments of about 7%.

The fund stated that it succeeded in ending this year with positive results, by recording total profits and other comprehensive income of $43.9 million and achieving an annual return on average investments of 6.83%.

Bahrain’s Future Generations Fund

The fund also announced the registration of total assets under management amounting to $520.9 million.

In its statement, FGF indicated that the year 2020 began with assets estimated at $917.8 million, as $450 million was deducted after the issuance of Decree-Law No. 23 of 2020 regarding the disposal of part of the future generations reserve account funds to “support the state’s general budget to reduce the repercussions of the Coronavirus pandemic and in support of national efforts to address the pandemic.”

“Nevertheless, the Fund ended the fiscal year with assets estimated at $520.9 million, since FGF achieved total returns of $43.9 million, which reflects the wise decisions taken and the proactive measures adopted,” the statement said.

The statement mentioned the strategic priorities of the fund, which it will undertake during the next phase, noting that it will be based on “continuing to build flexibility and create balance in the portfolio.”

In July 2020, the Bahraini Cabinet announced its approval to deduct $450 million from the FGF account for one time only. This is to support the budget in light of the Coronavirus pandemic crisis.

FGF was established in 2006 with the aim of saving for future generations by investing part of the oil revenues outside the Kingdom of Bahrain.

Budget deficit

In a separate context, the Bahraini government’s budget deficit amounted to 520 million dinars ($1.38 billion) in the first half of 2021.

According to the Bahraini Ministry of Finance, this deficit came down by 35% compared to the same period last year.

The ministry added that revenues amounted to 1.119 billion dinars ($2.97 billion) in the first half of 2021, up 23% over the same period last year.

According to the ministry, oil revenues increased by 33% due to the increase in oil prices, while non-oil revenues increased by only 4%.

Total public expenditures amounted to 1.639 billion dinars in the first half, a decrease of 4% compared to the same period in 2020, according to Reuters.

According to the Ministry of Finance, the results also showed a decrease in recurring expenses by 2% compared to the same period in 2020.

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