By the end of 2017, Bahrain’s debt is expected to reach 65% of GDP, as it will need an oil price of $120 to balance its books, NewsNow reported. “Oil is central to the six (Persian) Gulf Cooperation Council states (Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman), which have used the windfall of the past few years to spend lavishly. Unlike many oil exporters, such as Nigeria and Venezuela, they have high foreign-exchange reserves and low debts to cover short-term gaps. But public spending is generous and the private sector is heavily reliant on oil. To be sustainable in an era of lower prices, the rulers must change the structure of their economies,” explained The Economist. It added that Kuwait, the UAE and Qatar, which have small populations and high foreign-exchange reserves, can get by for a decade. But the other three states (Saudi Arabia, Oman and Bahrain) are in a trickier position. Oman and Bahrain have relatively low reserves.
