Bahrain Economic Forecast

Bahrain Economic Outlook

July 3, 2018

Bahrain is set to receive a financial aid package from Saudi Arabia, the UAE and Kuwait to ensure financial and fiscal stability, although precise details have yet to be disclosed. This comes as international reserves remain low and the country is having trouble finding external financing for its budget deficit. Low oil prices in recent years have depleted the government’s coffers and seen the public debt-to-GDP ratio nearly double in the space of three years. The perilous fiscal position has put pressure on the country’s dollar peg in recent weeks, with the dinar slipping to a 17-year low against the dollar in late June, just before the Gulf states announced financial support.

Bahrain Economic Growth

Fixed investment growth, supported by key infrastructure projects like the Alba Line 6 expansion, coupled with slightly higher oil output and increasing prices, should support the economy this year. Weak government finances and tightening financial conditions remain downside risks, however. Met the why particular panelists expect GDP to grow 2.8% in 2018, up 0.1 percentage points from last month’s estimate, and also 2.8% in 2019.

Bahrain Economy Data

20132014201520162017
Population (million)1.31.31.41.41.5
GDP per capita (USD)25,90025,31922,65822,49824,232
GDP (USD bn)32.533.331.132.135.2
Economic Growth (GDP, annual variation in %)5.44.42.93.23.9
Consumption (annual variation in %)9.9-0.71.90.5-  
Investment (annual variation in %)16.95.9-8.511.0-  
Unemployment Rate4.34.14.24.3-  
Fiscal Balance (% of GDP)-3.3-3.6-13.0-13.6-11.0
Public Debt (% of GDP)41.342.060.372.179.8
Money (annual variation in %)8.26.52.91.24.2
Inflation Rate (CPI, annual variation in %)3.22.71.82.81.4
Policy Interest Rate (%)0.500.500.751.001.75
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)7.44.6-2.4-4.6-3.9
Current Account Balance (USD bn)2.41.5-0.8-1.5-1.4
Trade Balance (USD billion)4.33.70.8-0.8-0.7
Exports (USD billion)25.523.416.512.815.3
Imports (USD billion)21.219.715.713.616.0
Exports (annual variation in %)11.9-8.2-29.6-22.720.2
Imports (annual variation in %)8.0-7.0-20.6-13.518.3
International Reserves (USD)5.05.83.12.22.3

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Bahrain Facts

ValueChangeDate
Exchange Rate0.380.03 %Jul 17
Stock Market1,3580.04 %Jul 17

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