CONTENT PREVIEW
Country Risk

Gulf financial support for Bahrain likely conditional on tax increases and pension reform, increasing likelihood of protests

11 October 2018

Event

On 4 October, the governments of Kuwait, Saudi Arabia, and the United Arab Emirates agreed to provide Bahrain with USD10 billion in financial aid.

On the same day that the aid was announced, the Bahraini government announced a fiscal programme that is intended to eliminate the fiscal deficit, currently 6.9% of GDP, by 2022. The financial package would be scheduled to be delivered over several years via a long-term interest-free loan, and has almost certainly been conditioned on Bahrain reducing government expenditures on social welfare programmes and government wages.

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