Bahrain draft budget rejected
Bahrain's parliament rejected a draft budget in a move that may stall infrastructure spending as the government attempts to counteract falling energy prices in the economic crisis, local media reported yesterday.
The delay in approving the government's proposed budget is threatening to slow government spending during the first months of the year. Bahrain's Ministry of Works has said it put all future roads projects on hold until the budget is approved. The parliament's financial and economic affairs committee is demanding the government increase its proposed spending on social services and education by 179 million Bahraini dinars (Dh175m). This would increase projected spending by 8.9 per cent.
Members of parliament suggest additional spending be contributed by state-owned Bahrain Petroleum Company and the country's state-owned Mumtalakat wealth fund.
The Gulf state is facing a widening deficit in its public spending due to the sharp fall in oil prices.
Economists estimate that its budget breaks even at an oil price of around $70 per barrel, while oil is currently trading at around $40 per barrel.
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