economy of bahrain

Bahrain has grown successfully over the past 10 years, due its liberal economic policies, and has a clear roadmap for improving the prosperity of all in society. The economy of Bahrain according to the index of economic freedom of 2006, is considered to be the most freedom in the middle east and occupies the twenty fifth rank in the world. The progress of its economy is because that the government of Bahrain wants to diversify the economy in order to reduce dependence on its oil which is decreasing yearly and because it encourages the foreign investment.

The economy of Bahrain is described as a modern economy with regular organization and has a distinctive communications and transport infrastructure, as well as , there are many international companies operating in the Gulf –States and have their headquarters in Bahrain .

Bahrain has expanded its heavy industries, banking sector and tourism, so that it is considered to be the main banking hub in the Gulf states and center for Islamic finance .This led to strong organizational structure for industry in Bahrain.

It has benefited from the boom of oil in 2001, that led to economic growth and succeeded to attract investments from Gulf States that contributed in developing infrastructure and other projects to improve the standard of living such as health, education, housing, electricity , water supply and roads .

The oil and natural gas are the main resources in Bahrain that form 60 % of its revenues. Other industries of Bahrain include aluminum and its related factories , and manufacturing and repairing of ships .Bahrain has made great strides in aspects of technology of information and development of programmes related to modern solutions for the age’s problems .
Tourism in Bahrain has flourished due to the large number of tourist sights that its root belong to ancient civilizations, in addition to modern sights , popular and gold markets .
The National Development Strategy is a regularly updated action-plan that will turn the Vision into reality, setting specific milestones in the public and private sectors including education and training, the economy, health and society.
Bahrain Economy Data
2011 2012 2013 2014 2015
Population (million) 1.1 1.2 1.2 1.2 1.2
GDP per capita (USD) 25,441 26,383 27,689 27,913 25,995
GDP (USD bn)
28.7 30.4 32.5 33.4 31.8
Economic Growth (GDP, annual variation in %)
2.1 3.4 5.4 4.5 2.9
Consumption (annual variation in %)
6.6 1.1 4.7 3.0 –
Investment (annual variation in %)
-35.1 27.5 -13.7 0.9 –
Unemployment Rate
4.0 3.9 4.3 4.1 4.2
Fiscal Balance (% of GDP)
-0.3 -2.0 -3.3 -3.6 –
Public Debt (% of GDP)
28.9 33.6 41.3 42.0 –
Money (annual variation in %)
3.4 4.1 8.2 6.5 –
Inflation Rate (CPI, annual variation in %)
-0.4 2.8 3.3 2.7 1.8
Policy Interest Rate (%)
0.50 0.50 0.50 0.50 0.75
Exchange Rate (vs USD)
0.38 0.38 0.38 0.38 0.38
Exchange Rate (vs USD, aop)
0.38 0.38 0.38 0.38 0.38
Current Account (% of GDP)
11.2 7.2 7.8 3.3 –
Current Account Balance (USD bn)
3.2 2.2 2.5 1.1 –
Trade Balance (USD billion)
7.5 6.5 7.3 7.4 –
Exports (USD billion)
19.6 19.7 20.9 20.7 –
Imports (USD billion)
12.1 13.2 13.6 13.3 –
Exports (annual variation in %)
44.0 0.6 5.9 -0.8 –
Imports (annual variation in %)
8.2 9.3 3.2 -2.5 –
International Reserves (USD)
4.5 5.2 5.3 5.2 –

http://www.focus-economics.com/countries/bahrain


Bahrain GDP
GDP at purchaser’s prices is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources. Data are in current U.S. dollars. Dollar figures for GDP are converted from domestic currencies using single year official exchange rates. The GDP in Bahrain was worth 32.22 billion US dollars in 2015. The GDP value of Bahrain represents 0.05 percent of the world economy. GDP in Bahrain averaged 12.01 USD Billion from 1980 until 2015, reaching an all time high of 33.85 USD Billion in 2014 and a record low of 3.05 USD Billion in 1986.
Date Value Change, %
2005 15.97
2006 18.5 15.88%
2007 21.73 17.43%
2008 25.71 18.32%
2009 22.93 -10.78%
2010 25.71 12.10%
2011 28.77 11.91%
2012 30.74 6.86%
2013 32.53 5.82%
2014 33.38 2.61%
2015 31.12 -6.78%

Bahrain – Real GDP growth
Annual percentage growth rate of GDP at market prices based on constant local currency. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources.
Year Value Change, %
2005 6.8
2006 6.5 -4.46%
2007 8.3 28.25%
2008 6.2 -24.74%
2009 2.5 -59.29%
2010 4.3 70.68%
2011 2 -54.25%
2012 3.7 87.90%
2013 5.4 45.31%
2014 4.4 -19.68%
2015 2.9 -34.20%
2016 2.1 -26.58%

Bahrain – GDP per capita
GDP per capita is gross domestic product divided by midyear population. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources. GDP is expressed in current U.S. dollars per person. Data are derived by first converting GDP in national currency to U.S. dollars and then dividing it by total population.
Date Value Change, %
2005 17,962
2006 19,263 7.24%
2007 20,904 8.52%
2008 23,231 11.13%
2009 19,461 -16.23%
2010 20,823 7.00%
2011 24,075 15.62%
2012 25,221 4.76%
2013 26,166 3.75%
2014 26,322 0.59%
2015 24,058 -8.60%
2016 24,119 0.26%

Bahrain – CPI inflation
Inflation as measured by the consumer price index reflects the annual percentage change in the cost to the average consumer of acquiring a basket of goods and services that may be fixed or changed at specified intervals, such as yearly. The Laspeyres formula is generally used. Data for inflation are averages for the year, not end-of-period data.
Date Value Change, %
2006 2 -22.04%
2007 3.3 59.33%
2008 3.5 8.64%
2009 2.8 -21.17%
2010 2 -29.26%
2011 -0.4 -118.78%
2012 2.8 -848.11%
2013 3.3 19.15%
2014 2.7 -19.62%
2015 1.8 -30.74%
2016 3.6 98.53%


unemployment
The unemployment rate in Bahrain and other countries is defined as the number of unemployed people as percent of the labor force. The labor force includes the people who are either employed or unemployed, i.e. who don’t have a job but are actively looking for one. The labor force does not include people who are not looking for work, children, and the retired.

Unemployment Rate in Bahrain remained unchanged at 3.70 percent in December from 3.70 percent in November of 2012. Unemployment Rate in Bahrain averaged 4.18 percent from 2006 until 2012, reaching an all time high of 16 percent in December of 2006 and a record low of 3.30 percent in November of 2008.
Date Value Change, %
2007 5.6
2008 3.7 -33.93%
2009 4 8.11%
2010 3.6 -10.00%
2011 4 11.11%
2012 3.9 -2.50%
2013 4.4 11.82%
2014 4.2 -4.29%

Conclusion
Oil comprises 86% of Bahraini budget revenues, despite past efforts to diversify its economy and to build communication and transport facilities for multinational firms with business in the Gulf. As part of its diversification plans, Bahrain implemented a Free Trade Agreement (FTA) with the US in August 2006, the first FTA between the US and a Gulf Countries. Low oil prices have generated a budget deficit of at least a $4 billion deficit in 2015, 13% of GDP. Bahrain has few options for covering this deficit, with meager foreign assets and a constrained borrowing ability, stemming in part from a sovereign debt rating averaging just above “junk” status.

Other major economic activities are production of aluminum – Bahrain’s second biggest export after oil – finance, and construction. Bahrain continues to seek new natural gas supplies as feedstock to support its expanding petrochemical and aluminum industries.

In 2011 Bahrain experienced economic setbacks as a result of domestic unrest driven by the majority Shia population, however, the economy recovered in 2012-15, partly as a result of improved tourism. In addition to addressing its current fiscal woes, Bahraini authorities face the long-term challenge of boosting Bahrain’s regional competitiveness—especially regarding industry, finance, and tourism—and reconciling revenue constraints with popular pressure to maintain generous state subsidies and a large public sector.