Manama: Bahrain on Thursday announced a fiscal overhaul aimed at balancing its budget by 2022, backed up by a $10-billion support package from key Gulf allies.
The plan aims to save 800 million Bahraini dinars ($2.1 billion, 1.84 billion euros) annually, the government said, as the kingdom looks to curb its debt after years of lower oil prices.
Neighbouring Saudi Arabia, the United Arab Emirates and Kuwait have agreed a package worth $10 billion to “support the funding requirements”, a Bahraini government statement said.
The reform programme includes cutting public expenditure and government waste, voluntary retirements for government workers and “redirecting” state subsidies.
The authorities said they are also looking to increase “non-oil revenues, to drive economic growth, diversify government income streams and align non-oil revenue with positive economic growth”.
Khalid al-Rumaihi, executive director of Bahrain’s Economic Development Board, said the country requires $20 billion to balance its books and that the government will provide half of that figure.
Bahrain’s budget deficit is expected to reach $3.5 billion in 2018, after hitting about $5 billion in 2017.
Located between rival regional powers Saudi Arabia and Iran, Bahrain has been ruled for more than two centuries by the Sunni Al-Khalifa dynasty.
Saudi Arabia has been a major supporter and in 2011 sent in forces along with the UAE to help protect Bahrain’s rulers against protests by the Shiite majority.