IMF: Bahrain's GDP to grow 2.6% this year
MENAFN - 10/09/2009
(MENAFN) The International Monetary Fund (IMF) said that Bahrain's economy is expected to grow 2.6 percent in 2009, compared to last year's forecast of 6.1 percent growth, as banking sector losses and sluggish oil output hit growth, Reuters reported.
The IMF said that Bahrain's banking sector, which is the largest single contributor to its GDP, has been hit hard by the global crisis, in addition to being hit by the declining oil prices, as government revenues depend to about 75 percent on income from oil.
The IMF also said that the government has been right in keeping the Bahraini dinar pegged against the US dollar in order to keep inflation low.
It noted that the Kingdom's inflation has been kept contained compared to other GCC countries, despite pressures in the region during 2007-08.
The IMF attributed the low level of inflation partly to the role of government subsidies and infrastructure development projects, which have helped to limit housing bottlenecks.
It said that several locally-incorporated banks incurred losses on their international securities portfolios and witnessed a steep decline in deposits; however, parent banks or shareholders brought in some capital and boosted deposits or credit lines.
The IMF noted that these resulted in a balance of payments deficit, with gross international reserves declining from seven and a half months of imports in 2007 to five and a half months in 2008.
MENAFN - 10/09/2009
(MENAFN) The International Monetary Fund (IMF) said that Bahrain's economy is expected to grow 2.6 percent in 2009, compared to last year's forecast of 6.1 percent growth, as banking sector losses and sluggish oil output hit growth, Reuters reported.
The IMF said that Bahrain's banking sector, which is the largest single contributor to its GDP, has been hit hard by the global crisis, in addition to being hit by the declining oil prices, as government revenues depend to about 75 percent on income from oil.
The IMF also said that the government has been right in keeping the Bahraini dinar pegged against the US dollar in order to keep inflation low.
It noted that the Kingdom's inflation has been kept contained compared to other GCC countries, despite pressures in the region during 2007-08.
The IMF attributed the low level of inflation partly to the role of government subsidies and infrastructure development projects, which have helped to limit housing bottlenecks.
It said that several locally-incorporated banks incurred losses on their international securities portfolios and witnessed a steep decline in deposits; however, parent banks or shareholders brought in some capital and boosted deposits or credit lines.
The IMF noted that these resulted in a balance of payments deficit, with gross international reserves declining from seven and a half months of imports in 2007 to five and a half months in 2008.