Bahrain Economic Forecast

Bahrain Economic Outlook

May 10, 2022

After economic growth picked up in Q4 2021, momentum is likely carrying through to H1 2022. Prices for oil have surged since the start of the year—to above the country’s breakeven price—due to the outbreak of the war in Ukraine on 24 February, which should have buoyed public coffers. Moreover, in mid-February authorities dropped all remaining Covid-19 restrictions—including those on mobility and on venue capacity—which should have supported consumption and spending on services. Additionally, the tourism industry improved significantly in the first three months of the year, largely thanks to big-ticket events such as the Formula 1 Grand Prix in March. Lastly, the external sector also performed well in Q1: Exports surged 83% year-on-year while imports increased by just 4%.

Bahrain Economic Growth

GDP growth is set to pick up pace this year, following 2021’s partial recovery from the pandemic. Elevated prices for oil will lead to current account and fiscal surpluses and avoid some potential austerity measures as part of a move to balance the budget. That said, political tensions and the uncertain duration of the oil price boom cloud the outlook. FocusEconomics analysts project the economy to expand 3.3% in 2022, which is up 0.1 percentage points from last month’s forecast, and 2.8% in 2023.

Bahrain Economy Data

2015 2016 2017 2018 2019
Population (million)1.41.41.51.51.5
GDP per capita (USD)22,64522,59724,33425,42425,461
GDP (USD bn)31.032.235.337.738.5
Economic Growth (GDP, annual variation in %)2.93.53.81.82.0
Consumption (annual variation in %)-  -  -  -  -  
Investment (annual variation in %)-8.510.811.04.7-  
Unemployment Rate3.54.34.1-  -  
Fiscal Balance (% of GDP)-13.0-13.6-10.0-6.3-4.7
Public Debt (% of GDP)60.471.879.580.783.0
Money (annual variation in %)2.91.24.22.411.1
Inflation Rate (CPI, annual variation in %)1.92.81.42.11.0
Policy Interest Rate (%)0.751.001.752.752.25
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)-2.4-4.6-4.1-6.4-2.1
Current Account Balance (USD bn)-0.8-1.5-1.4-2.4-0.8
Trade Balance (USD billion)0.8-0.8-0.5-1.10.9
Exports (USD billion)16.512.815.518.018.1
Imports (USD billion)15.713.616.019.017.2
Exports (annual variation in %)-29.6-22.721.416.20.5
Imports (annual variation in %)-20.6-13.518.318.8-9.6
International Reserves (USD)3.12.22.31.93.4

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Bahrain Facts

Value Change Date
Exchange Rate0.380.03 %Jan 01

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