Bahrain 

Bahrain country policy

Policy established 03 April 2011

• Case-by-case assessment
• The country ceiling is 1500 mln euro
• Early warning signal 500 mln euro
• - of which was used as at 2011-06-30 0 mln euro

Country class: 4

Given the security situation in Bahrein, new applications for cover will be handled cautiously, with special attention for the pre credit risk

Bahrain country facts

Atradius Dutch State Business Economic Research
Country Report last updated :  July 1th, 2011

Country :  BAHRAIN

Political Situation
Very Uncertain

Head of state
King Hamad bin Isa al-Khalifa. 

Form of government
The king rules by decree. Rubber stamp parliament. Main opposition party Wefaq, representing a population majority, only gained 18 of 40 seats in the Chamber of Deputees. 

Internal Economic Situation
Hit By Political Unrest

General situation
Since oil reserves are small, Bahrain has diversified its economy: tourism (Saudi’s), financial services (a greater GDP share than oil), oil refinery and chemical industry contribute to GDP. In that respect the domestic economy is badly hit by the political unrest: GDP-growth is scaled back to 2.4% in 2011. Especially financial and other services are suffering from the turmoil and from competition of Dubai and Qatar. Exports of goods are performing better, especially aluminium (additional capacity from 2011). Inflation is rising to >4% p.a. in 2011 due to higher oil seed and grain prices. Reasonably moderate corruption: 48th of 178 in the global TI Index.

External Economic Situation
Reasonably Solid

Main sources of foreign exchange
(Refined) oil (81% of total exports), off shore banking, tourism, aluminium.

Main foreign markets
Saudi Arabia and other Gulf-states.

Main expenses of foreign exchange
Crude oil (50%), capital goods, agricultural products.

Balan ce of payments  
Political unrest has badly hurt Bahrain’s position as exporter of services: increasing deficits on the service account are  exceeding the large trade surpluses since 2011, contributing to current account deficits. The Bahraini dinar is pegged to the US$ for over two decades.