Macroeconomic Forecast Bahrain

Bahrain's budget will fall further into deficit throughout 2012, as the government's large-scale stimulus programme results in an aggressive ramp up in current spending. We project the fiscal deficit expanding to 5.4% of GDP in 2012, before falling to 1.5% by the end of our five-year forecast period. These new spending measures will become increasingly problematic over the coming years, particularly given the weak prospects for fiscal consolidation and the elevated risk of a moderation in oil prices at a later stage.

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