Bahrain Economic Forecast

Bahrain Economic Outlook

February 6, 2018

The economy gathered momentum in Q3, according to recent figures. At 3.6% year-on-year, growth was up marginally from the prior quarter, spurred by a dynamic non-oil sector. The wholesale and retail trade sub-sector surged, as did the hotels and restaurants sub-sector, which was likely boosted by the burgeoning tourism industry—visitors were up sharply in January–September, particularly from neighboring Gulf countries. However, the oil sector declined due to ongoing output restrictions, while construction was limp. In early January the government increased petrol prices to tame the sizeable budget deficit. The move came soon after the introduction of new excise taxes from 30 December. However, the fiscal position remains weak, and international reserves are low; they dipped sharply in November after briefly rising following a bond sale.

Bahrain Economic Growth

Growth this year will be supported by healthy infrastructure spending, with projects including the Alba Line 6 expansion and a new oil pipeline between Bahrain and Saudi Arabia underway. However, continuing fiscal consolidation and oil production cuts will drag on growth. FocusEconomics panelists expect GDP to grow 2.6% in 2018, down 0.1 percentage points from last month’s estimate, and 2.8% in in 2019.

Bahrain Economy Data

20122013201420152016
Population (million)1.21.21.31.31.3
GDP per capita (USD)25,15426,10926,25823,98824,067
GDP (USD bn)30.732.533.331.131.8
Economic Growth (GDP, annual variation in %)3.75.44.42.93.0
Consumption (annual variation in %)1.19.9-0.71.9-  
Investment (annual variation in %)9.816.95.9-12.1-  
Unemployment Rate3.94.34.14.2-  
Fiscal Balance (% of GDP)-2.0-3.3-3.6-13.0-13.0
Public Debt (% of GDP)33.641.342.060.372.8
Money (annual variation in %)4.18.26.54.82.4
Inflation Rate (CPI, annual variation in %)2.83.32.71.82.8
Policy Interest Rate (%)0.500.500.500.751.00
Exchange Rate (vs USD)0.380.380.380.380.38
Exchange Rate (vs USD, aop)0.380.380.380.380.38
Current Account (% of GDP)8.47.44.6-2.4-4.7
Current Account Balance (USD bn)2.62.41.5-0.8-1.5
Trade Balance (USD billion)6.57.37.40.8-0.8
Exports (USD billion)19.720.920.716.512.8
Imports (USD billion)13.213.613.315.713.6
Exports (annual variation in %)0.56.1-1.0-29.6-22.7
Imports (annual variation in %)9.13.0-2.2-20.6-13.5
International Reserves (USD)5.25.35.23.12.2

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Bahrain Facts

ValueChangeDate
Exchange Rate0.380.03 %Feb 20
Stock Market1,3450.04 %Feb 20

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