Bahrain Economic Outlook
November 3, 2020The economy likely recovered somewhat in the third quarter, after contracting sharply in the second quarter due to restrictions imposed at home and abroad to contain the spread of the pandemic. In early September, Bahrain reopened its borders, boding well for tourism and trade. As such, non-oil trade with Saudi Arabia, and likely the region at large, increased strongly in Q3. However, business confidence slumped in the quarter compared to Q2, largely due to more pessimistic expectations regarding Q3’s performance. Turning to Q4, on 24 October restaurants and cafes reopened indoor service after a seven-month prohibition. However, foreign reserves have fallen, likely due to the recent oil price drop, which coupled with rising debt pose downside risks to the country’s finances. Meanwhile, as Covid-19 cases remain elevated, authorities recently extended a number of measures already in place to bolster the economy until year-end.
Bahrain Economic GrowthGDP will contract sharply this year as the pandemic, low oil prices and regional geopolitical unrest take their toll on activity. In 2021, growth is expected to return on the back of stronger global demand and the resumption of international travel. However, uncertainty over the pandemic still lingers, posing a key risk to the recovery. FocusEconomics analysts project the economy to expand 2.9% in 2021, which is up 0.5 percentage points from last month’s forecast, and 2.7% in 2022.
Bahrain Economy Data
5 years of Bahrain economic forecasts for more than 30 economic indicators.
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