February 27, 2019 / 7:54 AM / 6 months ago

UPDATE 1-Bahrain to reduce expenditure, increase revenue - finance minister

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MANAMA, Feb 27 (Reuters) - Bahrain is looking at reducing expenditure while increasing revenues and will tap the market for financing needs on an opportunistic basis, the finance minister said on Wednesday.

Sheikh Salman bin Khalifa Al Khalifa said the Gulf Arab island state had a clear medium-term fiscal balance plan that it can support thanks to a five-year $10 billion Gulf aid package.

“We need to ensure three things: that there is a reduction of operational expenditure, an increase of revenues - non-oil revenues in particular - and ensuring all our spending on subsidies is directed towards citizens,” he said.

The minister told a finance conference in Manama that the aid package pledged by Saudi Arabia, the United Arab Emirates and Kuwait covers a “major part of the financing requirement” for the fiscal balance plan.

“We will be going to the markets for the rest of that financing. We will be opportunistic,” he added.

Bahrain, which does not have the vast oil wealth of fellow Gulf states, was hit hard by the 2014 slump in crude prices. Last year the kingdom released a plan to fix its debt-burdened finances with the aim of eliminating the budget deficit by 2022.

As well as introducing a value-added tax in January, the government has cut subsidies, raised fees and is pushing economic diversification and inward investment. (Reporting by Lisa Barrington and Davide Barbuscia; Editing by Shri Navaratnam; Editing by Janet Lawrence)

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