Bahrain has unfolded an economic plan in which it intends to invest around $30 billion in strategic projects to drive its economic growth, augment jobs openings for citizens and attract foreign investments.
According to official sources, the government under its multi-year plan has adopted cost validation measures, including increasing VAT to 10%. The move is anticipated to support the island monarchy, balancing its budget by 2024.
Under this move, it plans to create approximately 20,000 jobs for its citizen by 2024 and train approximately 10,000 via its Tamkeen programme.
Additionally, the government has disclosed details of the strategy via which $2.5 billion in foreign direct investment will be attracted by 2023.
Sheikh Salman bin Khalifa Al Khalifa, Bahrain’s Minister of Finance and National Economy, commented that the indicated real year-on-year growth of 5.7 percent in the second quarter of this year due to the government's rapid healthcare and economic action throughout Covid-19 strengthened the foundation their recovery.
The International Monetary Fund states that Bahrain's GDP shrank by 5.4 percent last year, owing to a severe decline in non-oil output. It added that the nation, which is the smallest of the six members of the GCC economic bloc, is predicted to grow by 3.3 percent this year as a result of its swift policy reaction to mitigate the pandemic's consequences.
The country's non-oil economy would rise by 3.9 percent in 2021 as a result of increased vaccination distribution, which will boost economic activity.
According to the Bahrain government, six new sector approaches will be implemented across oil and gas; telecommunications, IT and digital economy; logistics; financial services; tourism; and the manufacturing sector. This move will hopefully help the non-oil sector grow 5% by 2022 annually.
Bahrain is also taking moves to streamline the process of obtaining company licenses and will launch an online platform to showcase investment possibilities in the country. It will also start a residency programme to entice talent, but no specifics have been released.
Source Credit - https://www.thenationalnews.com/business/economy/2021/11/01/vat-increase-and-jobs-boost-as-bahrain-unveils-economic-plan/