Government Increases Bread Subsidies

The Bahraini government has agreed to extra bread subsidies of BHD3mn (US$7.9mn) in order to keep down the price of this food staple. Under the new scheme, a 50kg bag of flour will be sold to bakeries for BHD2 instead of the BHD2.7 it currently sells for. This move follows an extraordinary parliamentary meeting in January in which the Prime Minister announced the creation of a BHD40mn fund for social allowances and food subsidies to mitigate the effects of inflation on lower-income groups. However, there are concerns that such a strategy could backfire in the long run, as BMI believes

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