Bahrain Economic Forecast

Bahrain Economic Outlook

February 5, 2019

The economy softened in the third quarter, driven by a contraction in the mining and quarrying sector, although this was partially offset by faster growth in the financial sector. Turning to the fourth quarter, the economy likely performed poorly due to a sharp fall in crude oil prices from mid-October. More positively, foreign reserves rose in November, likely boosted by financial support from Gulf neighbors. Meanwhile, in the political arena, the 2019-2022 Government Action Plan received parliament’s stamp of approval in late January. The plan targets growth in the non-oil sector of the economy and aims to enhance the effectiveness and efficiency of public spending.

Bahrain Economic Growth

The construction and tourism sectors should keep the economy afloat going forward, while the recently agreed aid package should boost business confidence. However, the introduction of VAT and a tighter fiscal stance will likely hurt domestic demand in the short-term. Met the why particular panelists expect GDP to grow 2.5% in 2019, down 0.1 percentage points from last month’s forecast, and 2.4% in 2020.

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 %Feb 14
Stock Market1,3720.04 %Feb 14

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