Bahrain Economic Forecast

Bahrain Economic Outlook

May 8, 2018

The economy picked up pace for a second consecutive year in 2017, and the ongoing rally in oil prices bodes well for growth in 2018. Government finances and a lack of budgetary reforms remain pressing concerns, however; Bahrain lacks the reserves to finance the fiscal deficit created by low oil prices. In early May, an IMF director urged the government to implement budget reforms to reduce the large shortfall in the medium term. The implementation of a VAT is likely for next year, although this move alone would be insufficient to fix the country’s fiscal problems. Recently discovered offshore oil and gas reverses could boost the country’s economic and fiscal fortunes, but in the longer term.

Bahrain Economic Growth

Resilient fixed investment for key projects such as the Alba Line 6 expansion, a new airport terminal and a new oil pipeline to Saudi Arabia should support the economy this year. Ongoing oil production cuts and tighter financial conditions remain key downside risks. Met the why particular panelists expect GDP to grow 2.7% in 2018, unchanged from last month’s estimate, and 2.8% in in 2019.

Bahrain Economy Data

20132014201520162017
Population (million)1.21.31.31.31.3
GDP per capita (USD)26,11926,25823,98824,067-  
GDP (USD bn)32.533.331.131.8-  
Economic Growth (GDP, annual variation in %)5.44.42.93.0-  
Consumption (annual variation in %)9.9-0.71.9-  -  
Investment (annual variation in %)16.95.9-12.1-  -  
Unemployment Rate4.34.14.2-  -  
Fiscal Balance (% of GDP)-3.3-3.6-13.0-13.0-  
Public Debt (% of GDP)41.342.060.372.8-  
Money (annual variation in %)8.26.54.82.4-  
Inflation Rate (CPI, annual variation in %)3.32.71.82.8-  
Policy Interest Rate (%)0.500.500.751.00-  
Exchange Rate (vs USD)0.380.380.380.38-  
Exchange Rate (vs USD, aop)0.380.380.380.38-  
Current Account (% of GDP)7.44.6-2.4-4.7-  
Current Account Balance (USD bn)2.41.5-0.8-1.5-  
Trade Balance (USD billion)7.37.40.8-0.8-  
Exports (USD billion)20.920.716.512.8-  
Imports (USD billion)13.613.315.713.6-  
Exports (annual variation in %)6.1-1.0-29.6-22.7-  
Imports (annual variation in %)3.0-2.2-20.6-13.5-  
International Reserves (USD)5.35.23.12.2-  

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Bahrain Facts

ValueChangeDate
Exchange Rate0.380.03 %May 21
Stock Market1,2680.04 %May 21

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