DUBAI- Bahrain’s budget deficit shrank to 4.7% of gross domestic product (GDP) in 2019 from 6.3% a year earlier, the ministry of finance said on Monday citing preliminary fiscal results.

The small Gulf state aims to deliver a balanced budget by 2022 as part of a programme of fiscal reforms linked to a $10 billion financial aid package received in 2018 from its Gulf allies.

Reforms so far included a spending review, a voluntary retirement scheme for public sector workers and the introduction of a value added tax.

Bahrain saw its primary budget deficit – which excludes interest payments – decrease 85% year-on-year in 2019, it said on Monday.

It expects the economy to grow 2.7% this year, from an estimated 2.1% in 2019.

Saudi Arabia, the United Arab Emirates and Kuwait gave Bahrain $10 billion in 2018 after low oil prices pushed its public debt to almost 93% of gross domestic product.

(Reporting by Davide Barbuscia; Editing by Jon Boyle and Alex Richardson) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: davide.barbuscia.reuters.com@reuters.net))

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