Bahrain

The outlook for the retail sector is mixed, with a recently released study reporting that some of Bahrain’s shopping centres are facing difficulties, while other indicators suggest that consumer sentiment remains solid and spending could be set to rise.

Lenders in Bahrain are hoping that the solid rates of growth many banks posted for the first quarter of 2012, coupled with forecasts estimating that the economy should expand between 3.2% and 3.6% this year, mark the beginning of an upward turn for the Kingdom’s banking industry.

The Kingdom’s telecommunications sector is looking to boost revenues this year as competition intensifies between service providers. Bahrain’s telecommunications market provides a strong base for the nation’s three firms, but fierce competition is driving efforts to increase value and enhance services.

Looking to build on recent successes, Bahrain’s insurance sector is reaching out to potential clients through greater use of tools such as bancassurance. The sector is also hoping plans for increased infrastructure spending will boost the call for coverage for the construction and industrial sectors.

Enhancing surface transport connectivity to neighbouring countries, the region and the rest of the world is a central priority for Bahrain. In addition to the development of internal transportation, the government has identified the importance of new road and rail links to Saudi Arabia and Qatar to strengthen the country’s trade position and support its economic diversification.

The banking sector could be facing a challenging year, with the swelling debt crisis in Europe threatening to overflow into the local economy. While most of the Kingdom’s lenders remain well capitalised and resistant to external shocks, overall growth could be muted.