IMF Sounds Alarm as Bahrain Is Seen Needing Urgent Spending Cuts
- Lower oil prices led to fiscal deficit of about 18% of GDP
- Fiscal measures could include VAT and a cut in subsidies
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Bahrain needs to make significant spending cuts to restore stability to its budget and improve investor confidence as the smallest economy among Gulf Arab monarchies tries to manage the impact of lower oil prices, the International Monetary Fund said.
The Washington-based lender said on Monday the drop in crude prices has largely offset “significant fiscal measures that were implemented,” causing the budget deficit and public debt in 2016 to stand at 18 percent and 82 percent of gross domestic product, respectively.