Bahrain Economy

While a combination of high break-even prices and lower levels of fiscal reserves could see falling oil prices push Bahrain further into the red, the kingdom is still set to post respectable economic growth for the year, buoyed by a solid performance from its non-hydrocarbons sector.

A solid performance from the non-oil sector and increased state spending are forecast to drive economic growth in Bahrain above both regional and global averages this year, though falling oil prices and rising debt levels could impact expansion in 2015. 

Bahrain beat GDP growth expectations in 2013 and is poised to keep pace with its larger regional neighbours this year, according to a recent report from the country’s Economic Development Board (EDB).

Focus in 2013 remained on maintaining growth and the continuing process of further diversification of the economy – something Bahrain has a head-start on over many of its neighbours. However, ongoing security concerns have overshadowed performance in some sectors.

While 2012 may have been marked by an ongoing political stalemate and effects from regional and local unrest, Bahrain managed to overcome negative pressures and produce solid growth for 2012.

The Kingdom’s economy is making steady progress towards regaining lost momentum following the global financial crisis and civil unrest in 2011. However, the recovery will need to be managed carefully if past losses are to be fully recouped.