"Even before COVID-19, lower oil prices since 2014 had widened fiscal and external imbalances and intensified macroeconomic vulnerabilities."
Bahrain’s economy is expected to contract in 2020 due to lower international oil prices and the spread of COVID-19. Fiscal and external deficits are expected to rise sharply in 2020, reversing the narrowing path observed in 2019. The overall budget deficit is projected to only gradually narrow over 2021-22 given lower oil revenues, and the large off-budget spending. Downside risks arise from the duration and depth of the twin crises of continued weakness in oil prices and COVID-19.