The International Monetary Fund on Friday urged Bahrain to press on with its efforts to lower government debt after the country's fiscal position took a step back last year.
Bahrain's government gross debt grew to 123.3 per cent of gross domestic product last year, up from 111.1 per cent in 2022. Bahrain's government gross debt is projected to increase to 125.1 per cent of GDP this year and to 128 per cent of GDP in 2025.
Meanwhile, the country's overall fiscal balance fell to minus 8.5 per cent of GDP.
“This marked a change from large improvements over 2021–22,” the IMF said in a news release after its Article IV consultations with the kingdom.
“The authorities agree that fiscal efforts should continue, beyond the conclusion of the FBP this year, to bring government debt significantly down over the medium term.”
The IMF also said Bahrain's ratio of non-hydrocarbon revenue to recurring expenditures was above the kingdom's Fiscal Balance Programme 40 per cent target last year.
The Washington-based lender's executive board also commended Bahrain's economic resilience, which has been supported by efforts to diversify its economy towards the non-hydrocarbon sector.
Bahrain in September introduced a new tax on multinational corporations that analysts believe will help the country's diversification efforts while it remains competitive. Under this domestic minimum top-up tax, multinational companies will be required to pay a tax of at least 15 per cent on profits made inside Bahrain.
The kingdom is among a number of Gulf countries in the middle of diversifying their economies away from oil and gas towards other non-hydrocarbon sectors such as technology and tourism.
Bahrain is also working on a $427 million waterfront development project due to be completed by 2026 in an effort to bring in more tourism.
Government data also shows that sectors such as transport and storage, information and communications, food service and accommodation were among the kingdom's top growing sectors in the second quarter of this year.
Bahraini authorities said they remain committed to implementing diversification efforts, and increasing female labour force participation and private sector employment.
Bahrain's Tourism Minister Fatima bint Jaafar Al Sairafi also announced during the Gateway Gulf 2024 forum this month the construction of 16 new hotels that will add more than 3,000 hotel rooms.
Ms Al Sairafi said the new hotels would help to boost tourism revenue, create hospitality jobs and support small and medium enterprises.
The IMF also encouraged Bahrain to broaden the VAT base, contain the wage bill, reduce extra-budgetary spending and reform energy subsidies.
Bahrain's economy is projected to grow by 3 per cent this year – unchanged from last year's economic growth – before expanding by 3.5 per cent in 2025.
Non-hydrocarbon activity is projected to generate 90 per cent of Bahrain's economy by 2029, with the kingdom's GDP set to expand by 3 per cent in the medium term.
Non-hydrocarbon economic growth is projected at 3.7 per cent this year before increasing to 4.1 per cent in 2025.
Inflation is projected to rise to 1.2 per cent this year after falling to 0.1 per cent last year, before steadying at 2 per cent in the coming years.
“However, uncertainty is high and downside risks large, including from potential escalation and expansion of regional conflicts, commodity price volatility and greater geoeconomic fragmentation,” the IMF said.
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COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
'Outclassed in Kuwait'
Taleb Alrefai,
HBKU Press
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Is it worth it? We put cheesecake frap to the test.
The verdict from the nutritionists is damning. But does a cheesecake frappuccino taste good enough to merit the indulgence?
My advice is to only go there if you have unusually sweet tooth. I like my puddings, but this was a bit much even for me. The first hit is a winner, but it's downhill, slowly, from there. Each sip is a little less satisfying than the last, and maybe it was just all that sugar, but it isn't long before the rush is replaced by a creeping remorse. And half of the thing is still left.
The caramel version is far superior to the blueberry, too. If someone put a full caramel cheesecake through a liquidiser and scooped out the contents, it would probably taste something like this. Blueberry, on the other hand, has more of an artificial taste. It's like someone has tried to invent this drink in a lab, and while early results were promising, they're still in the testing phase. It isn't terrible, but something isn't quite right either.
So if you want an experience, go for a small, and opt for the caramel. But if you want a cheesecake, it's probably more satisfying, and not quite as unhealthy, to just order the real thing.
The Travel Diaries of Albert Einstein The Far East, Palestine, and Spain, 1922 – 1923
Editor Ze’ev Rosenkranz
Princeton
Stage 2 results
1 Caleb Ewan (AUS) Lotto Soudal 04:18:18
2 Sam Bennett (IRL) Deceuninck-QuickStep 00:00:02
3 Arnaud Demare (FRA) Groupama-FDJ 00:00:04
4 Diego Ulissi (ITA) UAE Team Emirates
5 Rick Zabel (GER) Israel Start-Up Nation
General Classification
1 Caleb Ewan (AUS) Lotto Soudal 07:47:19
2 Sam Bennett (IRL) Deceuninck-QuickStep 00:00:12
3 Arnaud Demare (FRA) Groupama-FDJ 00:00:16
4 Nikolai Cherkasov (RUS) Gazprom-Rusvelo 00:00:17
5 Alexey Lutsensko (KAZ) Astana Pro Team 00:00:19
The specs: 2018 Chevrolet Trailblazer
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Fuel economy combined 12.2L / 100km
The specs
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