Bahrain Economic Forecast

Bahrain Economic Outlook

November 3, 2020

The 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 Growth

GDP 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

2015 2016 2017 2018 2019
Population (million)
GDP per capita (USD)22,64522,59724,33425,42425,461
GDP (USD bn)
Economic Growth (GDP, annual variation in %)
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 %)
Inflation Rate (CPI, annual variation in %)
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)

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Bahrain Facts

Value Change Date
Exchange Rate0.380.03 %Jan 01

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