Bahrain to limit 2015 government spending

08 January 2015

Bahrain public spending likely to be affected in 2015 as political instability delays annual budget

Government spending is likely to be limited in 2015 as a result of the falling oil price, a Bahraini member of parliament (MP) and Shura Council member tells MEED.

The MP, who wishes to remain anonymous, says that while the island needs hospitality and manufacturing construction projects to accelerate in order to drive economic growth amid volatile oil prices, he adds that he does not think the government can afford any new projects in 2015.

Bahrain has delayed its budget while it sorts out several domestic issues regarding political stability. Bahrain is extremely vulnerable to fluctuations in oil prices, with its breakeven crude price currently $132 a barrel (p/b).

The MP expects oil prices to remain low, but remaining above $40 a barrel, until June, after which he expects them to rebound back to $85-90 a barrel.

Bahrain’s 2015 budget is expected to be announced by the end of the first quarter. The MP expects that government spending will be dominated by wages, social initiatives and the diversification of the financial service sector.

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