Bahrain 

Bahrein landenbeleid

Bahrain country policy

Ook beschikbaar in Nederlands

Policy established 14 December 2009

  • No Restrictions
  • The country ceiling is 2000 mln euro
  • Early warning signal 400 mln euro
  • - of which was used as at 2010-01-31 0 mln euro

Country class: 2

Bahrain country facts

Atradius DSB Economic Research
Country Report last updated :  Nov 18th, 2009

Country :  BAHRAIN

Political Situation
Stable, But Little Political Freedom

Head of state
Sheik Hamad Bin Isa Al-Khalifa (oldest son and crown prince of former Sheik) took over power in 1999.

Form of government
No parliamentary democracy. Sheikh (Sunni minority) rules by decree. Main opposition party, Shia based al-Wefaq Islamic society won 17 out of 40 seats at parliamentary elections (Lower House) of Nov 2006 (earlier elections were boycotted). Upper House appointed by King. Next general elections in 2010.

 

Internal Economic Situation
Small Open Economy; Lower Growth In 09

General situation
Bahrain has a more diversified economy than the other Gulf States: besides oil, also tourism (Saudi’s) and financial services contribute to GDP. Many emerging competitors. Lower real GDP growth in 2009 (2,9%). Domestic demand, esp. investments generate growth. Negative contribution external balance. High and increasing public spending, despite lower oil prices: first budget deficit since 2002 of -0.3% and lower inflation (3%, “recovered” USD, no imported inflation, weak domestic demand and lower commodity prices). Conservative budget with oil price of USD 40/b, so actually a surplus. Still a system of public price subsidies. Oil revenues accounts for 70% of public income. Interest rates a fixed margin above those in the US. Dinar’s peg to USD will be maintained in place (since 1981). Still strong (partly offshore) banking sector, but exposed to global assets and Dubai properties.

 

External economic situation
strong bop in 2009-2010.

Main sources of foreign exchange
Oil exports (80% of total exports), off shore banking centre, tourism, aluminium.

Main foreign markets
Diversified countries.

Main expenses of foreign exchange
Investments for industrial and infrastructural projects, agricultural products

 

Balance of payments 

Remark: the island’s offshore banking units (assets larger than domestic economy) are reclassified as residents.
IMF includes operations of offshore banking units in income balance of the external accounts.

Contact Atradius

Peter Trommar
Senior Economist
Tel: + 31 (0)20 553 2724
Email: peter.trommar@atradius.com