The Report: Bahrain 2020

Although it is one of the most diversified economies in the GCC, Bahrain did not emerge unscathed from the 2014 oil price crash. Since then, the country has worked to broaden state revenue streams, implementing new fiscal measures to balance the budget, such as the introduction of a 5% value-added tax in January 2019 and the lowering of state subsidies. Nevertheless, large-scale infrastructure projects and Bahrain’s liberal business environment bode well for future job and investment growth. Steps in the right fiscal direction have been acknowledged. For example, global credit ratings agency Standard & Poor’s upgraded Bahrain’s outlook from stable to positive in November. While expansion of the non-oil economy is expected to slow from 2.5% to 2.2%, the oil sector is due to move back into the black (0.2%). More broadly, well-developed ICT infrastructure, high technology penetration rates and a business-friendly ecosystem continue to prove Bahrain’s value offering to investors.