Bahrain becomes latest Gulf state to stall projects, drastically cut spending amid pandemic

Bahrain's government has announced it is cutting operational expenses by 30 percent.

1 min read

21 April, 2020

The IMF has forecasted Bahrain's budget deficit to be 16 percent of gdp [Getty]

Bahrain has become the latest Arab Gulf state to implement far-reaching spending cuts as the global coronavirus pandemic reduces government revenues and has sent oil prices crashing.

Manama announced that operating expenses for ministries and government departments will be slashed by 30 percent, according to the state's Bahrain News Agency.

As part of the cuts, a number of construction projects have been rescheduled amid efforts to allocate funds for emergency costs. Bahrain's cabinet also approved several money saving proposals, including a regulation allowing employers to put workers on unpaid leave.

The spending cuts follow a 4.3 billion dinar ($11.4 billion) package that was rolled out last month to help the country's struggling private sector. At the time of the package's implementation, Manama said the plan would not affect the state's budget deficit.

The International Monetary Fund projects Bahrain's budget deficit for 2020 to be at about 16 percent of gross domestic product.

Last month, neighbouring Saudi Arabia cut nearly 5 percent from its 2020 budget, casting uncertainty over whether the kingdom can still achieve its ambitious economic projects.

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