The State Budget

The financial policies of the Kingdom of Bahrain are thoughtfully designed and implemented under the guidance of Bahrain’s Economic Vision 2030. This vision is a long-term roadmap focused on elevating living standards and driving sustainable economic growth across the nation. Through comprehensive planning and strategic foresight, Bahrain remains committed to building a resilient and sustainable economy that meets the needs of all citizens and supports future generations.

Budget Planning and Approval Process

The fiscal budget of Bahrain is meticulously prepared on a bi-annual basis (every two years), spanning two fiscal years. This comprehensive budget is developed by the Ministry of Finance & National Economy and undergoes rigorous review and approval by the Council of Representatives. Such a robust legislative and participatory process ensures the effective allocation of resources, inclusiveness, accountability, and transparency in all government financial activities.

Participatory Budgeting

In line with its commitment to transparency and public engagement, Bahrain regularly publishes a wide range of reports, including financial statements, policies, initiatives, economic and fiscal plans, as well as the State Budget. These publications are developed by the Ministry of Finance and National Economy in coordination with other ministries, government entities, the Council of Representatives, and members of the community. The goal is to promote transparency and ensure that everyone has access to information related to the State Budget and broader financial matters. This inclusive approach helps ensure that the budget reflects the priorities, needs, and aspirations of citizens, thereby enhancing its effectiveness and alignment with the public interest.

Fiscal Results and Budgetary Projections (2025–2026)

The Kingdom of Bahrain’s State Budget’s fiscal results and projections for 2025 and 2026 reflect Bahrain’s prudent approach to fiscal management. Total revenues were forecasted at BHD 2.924 billion in 2025 and BHD 3.459 billion in 2026, with government expenditures estimated at BHD 4.380 billion and BHD 4.537 billion respectively. These figures demonstrate Bahrain’s ongoing commitment to responsible financial stewardship and the pursuit of balanced, sustainable growth.

Strategic Objectives of the State Budget

The Bahrain state budget is shaped by several pivotal objectives, designed to ensure both fiscal discipline and social advancement:

• Alignment with the Fiscal Balance Program: The budget is fully committed to the aims of the Fiscal Balance Program, which seeks to strengthen the national economy and secure long-term fiscal sustainability.
• Stimulating Economic Recovery: Dedicated provisions support the revitalization of the national economy and the creation of new opportunities for citizens and enterprises.
• Empowering Citizens: The budget reflects the Kingdom’s priority to continuously foster an environment of opportunity and progress for all Bahrainis.

Post-Pandemic Economic Recovery Plan

Recognizing the unprecedented global challenges posed by declining oil prices and the COVID-19 pandemic, the Government of Bahrain implemented decisive measures to protect the economy and support its people under Economic Recovery Plan. These efforts included:

• Loan Deferrals: Introduction of deferral options for individual and business loans to alleviate financial burdens.
• Enterprise Support Programs: Launch of comprehensive support programs for Bahraini enterprises to ensure business continuity.
• Salary Support Initiatives: Provision of salary support to Bahraini employees working in the private sector, ensuring workforce stability and family security.

These targeted interventions have been critical in ensuring business resilience, mitigating economic shocks, and sustaining Bahrain’s momentum towards economic recovery.

The Fiscal Balance Program

The Fiscal Balance Program is a cornerstone of Bahrain’s strategy to achieve a balanced national budget and reinforce the country’s economic foundations. The program is designed to:

• Accelerate fiscal consolidation and reduce the budget deficit.
• Enhance the effective use of national resources.
• Ensure the long-term sustainability of government finances, benefiting both current and future generations.

Further details on the program can be accessed via the official Fiscal Balance Program document.

Government Expenditures on Key Sectors

Bahrain’s budget demonstrates a strong focus on critical sectors essential for national development and prosperity, including:

• Health: Sustained investments in healthcare services and public health infrastructure.
• Education: Continued prioritization of quality education and lifelong learning opportunities.
• Employment: Initiatives designed to promote job creation and workforce development.
• Social Protection: Robust social welfare programs aimed at safeguarding vulnerable groups.
• Environment: Support for environmental sustainability and responsible resource management.
• Justice: Ongoing funding for justice sector reforms and the rule of law.

The Future Generation Reserve

The Future Generation Reserve (FGR) is a strategic financial initiative proposed by the Council of Representatives to safeguard national wealth for future generations. Funded through allocations from oil revenues, the reserve is professionally managed and invested to ensure long-term financial sustainability. FGR reflects Bahrain’s forward-looking vision to build economic resilience and intergenerational equity. It stands as one of the Kingdom’s most successful long-term fiscal policies.

Alignment with Sustainable Development Goals (SDGs)

Bahrain’s budget and related programs are closely aligned with the United Nations Sustainable Development Goals, notably:

• SDG 8: Decent Work and Economic Growth – Promoting sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all.
• SDG 16: Peace, Justice, and Strong Institutions – Advancing effective, accountable, and inclusive institutions at all levels.

Further details on SDG integration can be found at sdgs.gov.bh.