Bahrain Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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Bahrain Country Risk Report
Product Price
$1,195.00

Core Views

  • External financing from the rest of the GCC will help to shield the Bahraini non-oil sector from the ongoing retrenchment in public spending. Despite the negative impact of subsidy cuts on internal demand, we forecast Bahrain to grow at a relatively robust rate of 2.7% this year and 2.9% in 2017.

  • Bahrain's reputation as a stable and welcoming location to do business in the Gulf has suffered as a result of the volatile political climate. At the moment, it remains to be seen if Manama will be able to compete with Doha and Dubai in attracting investment into the all-important hospitality and financial services industry.

  • The economy's medium-term outlook remains contingent upon a lasting solution being found to the current political crisis. Unfortunately, we maintain our guarded outlook on the prospects that the government and opposition can come to some form of agreement in the near term.

  • Bahrain's weak medium-term fiscal prospects will force the government to make difficult choices. We believe that Manama will have little option but to introduce new taxes over the coming years, while the issue of spending consolidation will loom large on the agenda. Support from Saudi Arabia could delay these pressures, but would entail a significant loss of sovereignty.

  • The Central Bank of Bahrain (CBB) will continue to follow a pro-cyclical monetary policy over 2016, raising interest rates in line with the US Federal Reserve's moves. Although the government's subsidy cuts will trigger inflation, continued strength in the US dollar and subdued commodity prices will help to offset inflationary pressures.

Key Risks

  • A more pronounced regional crisis stemming from an uptick in tensions between Iran and the West could see risk premiums spike higher, particularly for Bahrain.

  • Failure to find a lasting solution to the political crisis has seen elements of the opposition becoming increasingly radicalised, with use of militant tactics such as improvised explosive devices. A continuation of this trend could result in Bahrain's 'safe haven' status suffering irreparable damage.

Macroeconomic Forecasts (Bahrain 2014-2017)
Indicator 2014 2015e 2016f 2017f
e/f = BMI estimate/forecast. Source: Central Bank of Bahrain, CIO, Ministry of Finance, BMI
Real GDP growth, % y-o-y 4.5 2.9 2.7 2.9
Nominal GDP, USDbn 33.8 35.3 37.5 39.9
Consumer price inflation, % y-o-y, eop 2.5 0.7 3.5 3.3
Exchange rate BHD/USD, eop 0.38 0.38 0.38 0.38
Budget balance, % of GDP -3.6 -10.6 -10.3 -8.2
Current account balance, % of GDP 3.3 -3.3 -4.5 -2.6
Executive Summary
5
Core Views
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Robust Construction Sector Will Limit Economic Slowdown
8
TABLE: MAIN INFRASTRUCTURE AND INDUSTRIAL PROJECTS
8
GDP By Expenditure Outlook
10
TABLE: GDP GROWTH FORECASTS
10
TABLE: GOVERNMENT CONSUMPTION FORECASTS
10
TABLE: PRIVATE CONSUMPTION FORECASTS
10
TABLE: FIXED INVESTMENT FORECASTS
11
TABLE: NET EXPORTS FORECASTS
11
External Trade And Investment Outlook
12
GCC Investment To Finance C/A Deficit
12
Outlook On External Position
13
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
13
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
13
TABLE: BREAKDOWN OF IMPORTS
14
TABLE: BREAKDOWN OF EXPORTS
14
Monetary Policy
15
Rate Hikes Will Add To Liquidity Squeeze
15
Monetary Policy Framework
16
TABLE: MONETARY POLICY FORECASTS
16
Chapter 2: 10-Year Forecast
19
Diversification And Political Stability Key To Long-Term Growth
19
TABLE: LONG-TERM MACROECONOMIC FORECASTS
19
Chapter 3: Political Outlook
23
SWOT Analysis
23
BMI Political Risk Index
23
Opposition Clampdown Raises Long-Term Instability Risk
24
TABLE: POLITICAL OVERVIEW
24
TABLE: OPPOSITION CRACKDOWN
25
Long-Term Political Outlook
26
Sun, Sea And Sectarianism: Prospects For Future Stability Assessed
26
Chapter 4: Operational Risk
29
SWOT Analysis
29
Operational Risk Index
29
Operational Risk
30
TABLE: OPERATIONAL RISK
30
Market Size And Utilities
31
TABLE: MIDDLE EAST AND NORTH AFRICA - MARKET SIZE AND UTILITIES RISK
31
Labour Costs
34
TABLE: REGULATIONS GOVERNING FLEXIBILITY OF WORKFORCE
34
Chapter 5:BMI Global Macro Outlook
39
Global Macro Outlook
39
Brexit Risk Casts A Long Shadow
39
TABLE: GLOBAL ASSUMPTIONS
39
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
40
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
41
MACROECONOMIC FORECAST
43
TABLE: MACROECONOMIC DATA & FORECASTS
43

Assess your risk exposure in Bahrain with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Bahrain with confidence.

Your subscription service includes:

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  • Online access for 12 months
  • The functionality to translate your online report into your choice of 10 languages - Arabic, Chinese, French, German, Italian, Japanese, Korean, Portuguese, Russian and Spanish
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