Bahrain Mirror: The Parliamentary Committee on Legislative and Legal Affairs rejected a draft law imposing a limit for the public debt not exceed 60% of the Gross Domestic Product (GDP).

This comes after the parliament and Shura council voted on this draft law, and referred it to the cabinet, which in return referred it to the king. The file was then returned to the Shura Council and Parliament to reconsider it.

The committee said in its report that the royal rejection to the draft law did not come against an article or clause in it, but the draft law was rejected as a whole.

It also added that approving the draft law in its current approach limits the government's ability to borrow loans, since the 60% of GDP limit does not meet the funding needs of the government. This would lead to the government's inability to meet debt deadlines, which would have serious repercussion on the country's credit situation, and its ability to borrow loans in the future.

Moreover, the committee clarified that the suggestion to raise the public debt limit, through amending article (13) of the draft law, will have negative results on the Kingdom's investments, and its credit classification on the global level. Also, this amendment would affect the trust of loaners, and increase interest rates.

Arabic Version