ECONOMICS - History

ECONOMICS - History

Bahrain

Oil and natural gas play a dominant role in Bahrain’s economy. Despite the Government’s past efforts to diversify the economy, oil still comprises 85% of Bahraini budget revenues. In the last few years lower world energy prices have generated sizable budget deficits - about 10% of GDP in 2017 alone. Bahrain has few options for covering these deficits, with low foreign assets and fewer oil resources compared to its GCC neighbors. The three major US credit agencies downgraded Bahrain’s sovereign debt rating to “junk” status in 2016, citing persistently low oil prices and the government’s high debt levels. Nevertheless, Bahrain was able to raise about $4 billion by issuing foreign currency denominated debt in 2017.
Other major economic activities are production of aluminum - Bahrain's second biggest export after oil and gas –finance, and construction. Bahrain continues to seek new natural gas supplies as feedstock to support its expanding petrochemical and aluminum industries. In April 2018 Bahrain announced it had found a significant oil field off the country’s west coast, but is still assessing how much of the oil can be extracted profitably.
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. Since 2015, the government lifted subsidies on meat, diesel, kerosene, and gasoline and has begun to phase in higher prices for electricity and water. 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 state. It plans to introduce a Value Added Tax (VAT) by the end of 2018.

1990200020102016
GNI, Atlas method (current US$) (billions)3.587.2723.5430.43
GNI per capita, Atlas method (current US$)7,22010,94018,97021,350
GNI, PPP (current international $) (billions)9.4323.0944.7762.72
GNI per capita, PPP (current international $)19,01034,74036,08044,010
GDP (current US$) (billions)3.178.0810.111.84
GDP growth (annual %)-1.64.11.5-1.7
Inflation, GDP deflator (annual %)5.10.9-0.42.1
Agriculture, forestry, and fishing, value added (% of GDP)2111
Industry (including construction), value added (% of GDP)14121112
Exports of goods and services (% of GDP)54383536
Imports of goods and services (% of GDP)56424438
Gross capital formation (% of GDP)29302825
Revenue, excluding grants (% of GDP)15.811.612.816.3
Net lending (+) / net borrowing (-) (% of GDP)-2.50.2-2.6-2.6
States and markets
Time required to start a business (days)....2422
Domestic credit provided by financial sector (% of GDP)58.552.782.576.8
Tax revenue (% of GDP)13.910.710.914.2
Military expenditure (% of GDP)........
Mobile cellular subscriptions (per 100 people)0.710.6118.792.1
Individuals using the Internet (% of population)084380
High-technology exports (% of manufactured exports)..70..
Statistical Capacity score (Overall average)........
Global links
Merchandise trade (% of GDP)88333326
Net barter terms of trade index (2000 = 100)..1008380
External debt stocks, total (DOD, current US$) (millions)........
Total debt service (% of exports of goods, services and primary income)........
Net migration (thousands)01510..
Personal remittances, received (current US$) (millions)........
Foreign direct investment, net inflows (BoP, current US$) (millions)-1725087274
Net official development assistance received (current US$) (millions)3.2......

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