Georgieva urges Gulf states to rebuild fiscal buffers amid oil-revenue and debt risks

Kristalina Georgieva told the International Monetary Fund and World Bank spring meetings that countries need stronger fiscal buffers as the Middle East war hits energy supplies and public finances. (imf.org) In her April 9 speech in Washington, the International Monetary Fund managing director called the conflict a “large, global, and asymmetric” supply shock. She said global daily oil flows were cut by about 13% and liquefied natural gas flows by about 20%. (imf.org) Georgieva said Brent crude rose from $72 a barrel on the eve of hostilities to a peak of $120 before easing. She said prices remained well above prewar levels and many countries were still paying high premiums for fuel supplies. (imf.org) For Gulf exporters, the shock is uneven. Georgieva said the impact depends on proximity to the conflict, whether a country exports or imports energy, and how much policy space it has left after years of deficits and debt. (imf.org) Bahrain stands out inside the Gulf Cooperation Council because it entered 2026 with weaker public finances than Saudi Arabia, the United Arab Emirates, or Qatar. An April 13 analysis citing International Monetary Fund data said Bahrain posted an 11% fiscal deficit in 2024 and public debt of 134% of gross domestic product. (agbi.com) That same analysis said Bahrain’s foreign exchange reserves were about $4.7 billion, below three months of import cover, and that debt had risen further after hostilities began. It also said roughly one-third of government revenue was already being absorbed by interest payments. (agbi.com) The International Monetary Fund’s Bahrain country page shows the fund concluded its 2025 Article IV consultation on January 23, 2026. The fund lists Bahrain’s 2026 real gross domestic product growth projection at 3.3% and consumer price inflation at 0.8%. (imf.org) Civil society groups used the same spring meetings to press the fund and the World Bank from the opposite direction. ActionAid said rising energy prices were worsening debt and living-cost pressures across low- and middle-income countries, and argued the institutions were still protecting creditors over households. (actionaid.org) The split captures the policy fight around the meetings: the fund is warning governments to preserve room for future shocks, while campaigners are pushing for debt relief and more spending protection during the current one. (imf.org) (actionaid.org) For Bahrain and other highly indebted states, rebuilding buffers now means finding cash in the middle of an energy and security shock. Georgieva’s message was that the next disruption will be harder to manage if governments arrive with empty reserves and rising debt. (imf.org)