IMF Tells Bahrain to Cut Spending

Bahrain needs to make significant spending cuts to restore stability to its budget and improve investor confidence as the smallest economy among Persian Gulf Arab monarchies tries to manage the impact of lower oil prices, the International Monetary Fund said, Arabian Business reported. IMF said 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% and 82% of gross domestic product, respectively. “A sizable fiscal adjustment is urgently needed to restore fiscal sustainability, reduce vulnerabilities, and boost investor and consumer confidence,” the IMF said in a statement after concluding regular consultations with Bahraini authorities. Bahrain, a close Saudi ally and the home of the US Fifth Fleet, has been more vulnerable to slumping oil prices than richer (Persian) Gulf Cooperation Council states (including Saudi Arabia, Kuwait, the UAE, Qatar  and Oman) after authorities increased spending in response to the global recession in 2009 and civil unrest two years later.