Bahrain Economic Forecast

Bahrain Economic Outlook

September 4, 2018

Bahrain remains in a pickle. The public debt-to-GDP ratio continues to soar, reaching 86.6% at the end of Q2, and has now more than doubled in the space of just four years. Short-term bond yields spiked further in the same quarter, signaling investors’ concerns over the weak fiscal and external positions. In addition, foreign reserves remained low in Q2 despite a slight increase from Q1; at the end of June, foreign reserves totaled USD 2.2 billion, covering less than two months of imports. On 15 August, Gulf Cooperation Council finance ministers met to discuss a fiscal balance program for Bahrain, although concrete details of the aid package have yet to be announced.

Bahrain Economic Growth

The oil sector should buttress economic activity going forward, thanks to higher oil prices and a new offshore pipeline to Saudi Arabia. In addition, financial assistance from neighbors should shore up confidence levels, although weak macroeconomic fundamentals will continue to weigh on the outlook. Met the why particular panelists expect GDP to grow 2.6% in 2018, down 0.2 percentage points from last month’s estimate, and 2.9% 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 %Sep 24
Stock Market1,3560.04 %Sep 24

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