Bahrain Subsidies Hit by Oil Prices

Bahrain Subsidies Hit by Oil Prices

Bahrain more than doubled the prices of beef and chicken, removing meat subsidies to save money as low oil prices squeeze government’s revenues, reported Reuters.

Only Bahraini citizens will be compensated with cash handouts from the government.

The original decision to remove meat subsidies was taken in August, to come in effect on September 1 but was postponed due to opposition in parliament.

Officials say this move was expected to save the government about $58-77 million annually

Sayed Majeed al-Hulaibi, who runs a meat shop in Manama, told Reuters that the noticeable absence of consumers from the main meat markets may be an attempt by them to boycotting meat in an effort to push prices back down.

Subsidy cuts are taking place across the Gulf Arab states as low oil prices have effected every aspect of economic life.

According to Gulf News, net earnings for banks in the region are expected to slide as government spending slows, citing the Standard and Poor’s ratings agency.

The agency added that “owing to the knock-on effects of lower oil prices on growth and asset quality, earnings could weaken over the next several quarters”.

Customer deposits in GCC banks only increased by 6% in the first and second quarters of 2015, compared with more than 10% in the previous eight quarters, S&P also said.

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