CATEGORY: OBG Business Barometer
Although Bahrain’s economy experienced a slowdown in 2018, it is expected to see a return to more robust growth this year, with positive forecasts underpinned by infrastructure development plans and the Fiscal Balance Programme 2018-22. Some 75% of the CEOs interviewed in the latest OBG Business Barometer: Bahrain CEO Survey say they have positive or very positive expectations for local business conditions in the coming 12 months. Impediments to this expected growth include regional political volatility, which 79% of respondents identify as the top external event that could impact the economy in the short to medium term.
Bahrain’s economy witnessed a slowdown in 2018, with growth falling to 1.8%, compared to 3.8% the previous year. The main drag on economic growth was a slowing oil sector, which contracted by 1.3%. Notwithstanding, Bahrain’s economy represents one of the most diversified in the region, as its oil sector’s contribution as a share of GDP has fallen rapidly since the turn of the millennium, from 43.6% in 2000 to 17.8% in 2018. Over the same period the financial services sector has grown, with its share of GDP expanding from 13.6% to 16.5%, while manufacturing’s share rose from 12.4% to 14.5%.
The IMF, which forecasts GDP growth will reach 3.3% in 2020, has noted that green shoots are beginning to emerge in the UAE, nourished by domestic credit growth and low unemployment figures. This is a sentiment that chimes with OBG’s assessment of the local market. The results of the latest Business Barometer: UAE CEO Survey reveal a generally upbeat and optimistic private sector, with 64% of respondents either positive or very positive about the country’s business environment over the next 12 months.