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Bahrain's economy is closely linked to the fluctuation in global crude oil prices as the rest of the region. However, its impact is much narrower compared to other Gulf countries due to the relatively diverse nature of the Bahraini economy. As such, the economy grew slightly by 2% in 2019 despite a sizeable contraction of the oil industry. Due to the COVID-19 pandemic, it plummeted to -4.9% in 2020 but came back to 2.2% in 2021 and 3.4% in 2022. GDP growth was expected to remain at 3% in 2023 and 2024, subject to the post-pandemic global economic recovery (IMF, January 2023).
Continuing fiscal reforms and emphasing better-targeted subsidies under the Fiscal Balance Program (FBP) helped to narrow the fiscal deficit of the country. The substantial pandemic-related crisis package of US$11.3 billion introduced in March 2020, and an additional US$1.3 billion stimulus package in June 2021 to support the sectors hardest-hit by COVID-19, have further limited the country’s fiscal space, and aggravated already weak growth dynamics. More favorable oil market conditions were projected to narrow the fiscal deficit to 8.4% of GDP in 2021 (World Bank, 2021). In 2020-2021, a series of reforms were laid to balance the budget by 2022, but public debt grew to 129.7% of GDP in 2020, 128.5% in 2021 and 119.5% in 2022. It is expected to reach 121.7% and 124.3% in 2023 and 2024 respectively (IMF, January 2023), with sizable gross financing needs. On the other hand, Bahrain's pledge to monetize newly-discovered hydrocarbon reserves of up to 80 billion barrels and around 20 trillion cubic feet of tight natural gas within the next five years will improve its outlook. The non-oil primary balance is expected to keep improving in the back of higher non-oil revenues projected at 6.7% of non-oil GDP in 2020 (Word Bank). Inflation remained low in 2021 (-0.6%) but came back at 3.5% in 2022. It is expected to reach 3.5% in 2023 before coming down to 1.8% in 2024 (World Economic Outlook IMF, January 2023).
Persian Gulf nations, among the world’s richest at the turn of the century, have lost ground as the oil price receded. Bahrain, Kuwait, Oman and Saudi Arabia are all dropping out of the global top 20 as living standards stagnate or decline. Unemployment rate among nationals was estimated at 6.6% in 2021 in Bahrain, and 5.5% in 2022. It should remain at 4.4% in 2023 and 4% in 2024 according to the latest World Economic Outlook of the IMF (January 2023).
Main Indicators | 2020 | 2021 | 2022 (E) | 2023 (E) | 2024 (E) |
---|---|---|---|---|---|
GDP (billions USD) | 34.62 | 39.30 | 44.39 | 44.87 | 47.09 |
GDP (Constant Prices, Annual % Change) | -4.6 | 2.7 | 4.2 | 3.0 | 3.8 |
GDP per Capita (USD) | 23,517 | 26,126 | 28,785 | 28,386 | 29,064 |
General Government Gross Debt (in % of GDP) | 128.5 | 126.3 | 117.6 | 124.7 | 127.9 |
Inflation Rate (%) | -2.3 | -0.6 | 3.6 | 2.2 | 2.2 |
Unemployment Rate (% of the Labour Force) | 5.9 | 6.6 | 5.0 | 4.4 | 3.6 |
Current Account (billions USD) | -3.25 | 2.60 | 4.02 | 2.32 | 1.76 |
Current Account (in % of GDP) | -9.4 | 6.6 | 9.1 | 5.2 | 3.7 |
Source: IMF – World Economic Outlook Database , Latest available data
Note: (e) Estimated Data
Bahrain counts a labor force of more than 820 000 out of its 1.47 million population. The contribution of the agriculture to Bahrain's economy is negligible due to a scarcity of fertile lands, low rainfall and the small size of the country. In 2022, its share of the GDP was 0.3% - one of the lowest shares in the world - and employed 1% of the labour force (World Bank, 2023). Date palm cultivation and the pearl industry used to account for a considerable share of the economy prior to the development of the oil industry.
In 2022,employment in industry amounted to 35% of the workforce, a rate that has been stable since 2010. Its share in the local economy is higher, at 44.8% in 2022 (World Bank, 2022), and revolves around aluminium, petrochemicals and food processing.The Alba aluminium shelter is one of the largest in the world, producing more than 2% of global output and 15% of Bahrain's GDP (NBK Bahrain).
The services sector employed 64% of the workforce, a rate that has declined since early 2000s, and accounted for 52.3% of the economy in 2022 (World Bank, 2023). Bahrain's financial sector plays a preeminent role among Gulf countries and contributes significantly to local economy. Other major services sectors include telecommunications and transportation. Tourism is another important sector of the economy and the country attracts almost 10 times its resident population in a given year.
Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
---|---|---|---|
Employment By Sector (in % of Total Employment) | 0.9 | 35.3 | 63.8 |
Value Added (in % of GDP) | 0.3 | 44.8 | 52.3 |
Value Added (Annual % Change) | 7.2 | 0.4 | 3.5 |
Source: World Bank - Latest available data.
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Monetary Indicators | 2015 | 2016 | 2017 | 2018 | 2019 |
---|---|---|---|---|---|
Baraini Dinar (BHD) - Average Annual Exchange Rate For 1 MUR | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 |
Source: World Bank - Latest available data.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Source: The Economist Intelligence Unit - Business Environment Rankings 2021-2025
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Bahrain's market constitutes one of the most diversified economies in the region. The country is very open to foreign trade, which accounted for 140% of the GDP in 2020 (World Bank, 2023). Petrochemical products account for over 60% of Bahraini exports, a share that is relatively low compared to the rest of the region. Bahrain has a strong steel and aluminium industry, accounting for up to 23.6% of exports. Petroleum products also account for the largest item of imports (30%), mainly crude oil imports from Saudi Arabia, followed by machineries, electrical and electronic equipment and cars and other vehicles.
Saudi Arabia is the top destination for Bahraini exports (17%), followed by the United Arab Emirates (9%), the United States (6%) and Oman (4.1%). Saudi Arabia was also the main supplier in 2021 (24% of total imports), followed by China (11.3%), Australia (5.7%) and the United Arab Emirates with 5.3% (Trade Economics, 2022).
Bahrain recorded a trade deficit of BD155 million (411.26 million USD) during 2022 compared to a deficit of BD643 million for the previous year (Zawya, 2023). Bahrain exports of goods stood at 22.36 billion USD in 2021, while imports increased from 12.68 billion USD to 14.18 billion USD in 2021 according to data from WTO. Exports of services increased to 13.22 billion USD in 2021, whereas imports of services increased to 10.28 billion USD (WTO, 2023).
The value of exports of Bahrain origin products increased 24%, reaching BD4.967 billion (13.18 billion USD) during 2022, compared to BD3.994 billion in the previous year. The value of imports into Bahrain increased 10% in 2022, reaching BD5.842 billion (15.5 billion USD), compared to BD5.316 billion for the previous year (Zawya, 2023).
Foreign Trade Indicators | 2017 | 2018 | 2019 | 2020 | 2021 |
---|---|---|---|---|---|
Imports of Goods (million USD) | 10,850 | 14,871 | 13,256 | 12,683 | 14,188 |
Exports of Goods (million USD) | 15,376 | 18,044 | 18,120 | 14,066 | 22,369 |
Imports of Services (million USD) | 7,800 | 8,077 | 8,083 | 9,263 | 10,289 |
Exports of Services (million USD) | 11,356 | 12,249 | 11,776 | 11,468 | 13,225 |
Imports of Goods and Services (Annual % Change) | 7.6 | 5.7 | -5.6 | -0.7 | n/a |
Exports of Goods and Services (Annual % Change) | 3.7 | 3.3 | 0.4 | -2.5 | n/a |
Imports of Goods and Services (in % of GDP) | 67.3 | 71.6 | 65.2 | 67.1 | n/a |
Exports of Goods and Services (in % of GDP) | 75.8 | 79.3 | 76.5 | 72.7 | n/a |
Trade Balance (million USD) | -700 | -1,066 | n/a | n/a | n/a |
Trade Balance (Including Service) (million USD) | 2,856 | 2,910 | n/a | n/a | n/a |
Foreign Trade (in % of GDP) | 143.1 | 150.8 | 141.7 | 139.8 | n/a |
Source: WTO – World Trade Organisation ; World Bank , Latest Available Data
Main Customers (% of Exports) |
2022 |
---|---|
Saudi Arabia | 13.7% |
United States | 8.6% |
United Arab Emirates | 7.4% |
Netherlands | 3.5% |
Oman | 2.9% |
See More Countries | 63.9% |
Main Suppliers (% of Imports) |
2022 |
---|---|
China | 14.5% |
Brazil | 10.6% |
Australia | 8.7% |
United Arab Emirates | 8.3% |
United States | 6.5% |
See More Countries | 51.5% |
Source: Comtrade, Latest Available Data
Source: Comtrade, Latest Available Data
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The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
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Latest Update: September 2023