Economy of Bahrain
GCC | |
Country group | |
---|---|
Statistics | |
Population | 1,472,233 (2022)[3] |
GDP | |
GDP rank | |
GDP growth |
|
GDP per capita | |
GDP per capita rank | |
GDP by sector |
|
3.635% (2022)[4] | |
Population below poverty line | N/A[6] |
Labour force | |
Labour force by occupation |
|
Unemployment |
|
Main industries | |
Main import partners | United Arab Emirates 27% China 11% Saudi Arabia 7% United States 5% Brazil 5% Japan 5% India 5% (2018 est.)[13] |
Gross external debt | $52.15 billion (2017 est.) |
Public finances | |
88.5% of GDP (2017 est.) | |
Revenues | $5.854 billion (2017 est.) |
Expenses | $9.407 billion (2017 est.) |
| |
The economy of
According to the 2020 edition of the
Economy overview
Oil and natural gas play a dominant role in Bahrain’s economy. Despite efforts to diversify the economy, according to the CIA World Fact Book: oil still comprises 85% of Bahraini budget revenues, meaning throughout the last few years lower world energy prices have generated sizeable budget deficits - about 10% of GDP in 2017 alone.[25] Bahrain is a rich country in the middle east and the north africa (MENA) region and its economy depends on oil & gas, international banking and tourism.[17]
In 2003 and 2004, the balance of payments improved due to rising oil prices and increased receipts from the services sector. As a result, the current account balance registered a surplus of US$219 million in 2003 and a surplus of US$442 million in 2004, compared to a deficit of US$35 million in 2002. Bahrain's gross international reserves increased substantially in 2004 to US$1.6 billion, up from US$1.4 billion in the previous three years (2001-2003).
Diversification
Though Current GDP per capita Archived 2012-05-04 at the
- The financial system is enjoying strong performance under favorable circumstances, and is likely to remain a major contributor to overall growth. The main risk stems from potential overheating in the economies of the region, but the system should be resilient to likely shocks.
- Prudential regulations are modern and comprehensive, and supervision is generally effective, especially in the dominant banking sector. Supervisory capacity needs to be expanded in line with new regulations and to keep up with the growth and increasing sophistication of financial institutions.
- The further expansion of the Islamic sector, the development of housing finance, and the deepening of securities markets are important for the future growth of the financial system. The banking and insurance sectors will eventually undergo consolidation. [1]
In 2005, Bahrain signed the
As a result, the economy has been well positioned to exploit the extra revenues generated in the region thanks to the sustained high oil prices since 2002. In January 2006, the United Nations Economic and Social Commission for Western Asia cited Bahrain as the fastest growing economy in the Arab world.
Between 1981 and 1993, Bahrain Government expenditures increased by 64%. During that same time, government revenues continued to be largely dependent on the oil industry and increased by only 4%. Bahrain has at times received significant budgetary support and project grants from Saudi Arabia, Kuwait and the United Arab Emirates.
The government has used its modest oil revenues to build an advanced infrastructure in transportation and telecommunications. Bahrain is a regional financial and business center. Tourism, especially from the region, has proved another significant source of income.
Bahrain has benefited from the oil boom since 2001, with economic growth of 5.5%. It has succeeded in attracting investment from other Persian Gulf states partly because it used the revenues of the 1970s-early 80s boom to invest in infrastructure development and other projects to improve the standard of living; health, education, housing, electricity, water, and roads all received attention.
The success of ventures such as the
As part of its efforts to build a modern economy, Bahrain has initiated a series of labour reforms under Minister of Labour Majeed Al Alawi in order to bring the labour market into line with international standards. Bahrain intends to expand its high tech industries, invest in research and development, and strengthen its competitive edge within a global economy. In 2006,it was announced that the Bahrain Science and Technology Park,a Kuwait Finance House Bahrain initiative would be a reflection of this effort to create a diversified economy, provide high quality jobs for locals and international workforce, providing a place for innovative and inventive thinking that will have direct benefits to the island nation.
In 2009 it was announced that the Bahraini Government would be developing land next door to the Bahrain International Circuit. The project being managed by @Bahrain is a mix of facilities including an exhibition and convention facility, a choice of hotel accommodations ranging from mid-market to luxury, a multi-purpose indoor arena, an automotive club and engineering facility, retail and leisure establishments, a tech-tainment (technology interacting with entertainment) centre, a research institute, a technology park and a focus on education and training. @Bahrain is part of the Mumtalakat group of companies and will dedicate more than 1 million square meters of business, entertainment and educational space with a value in excess of $2bn (BD 850 million), making it one of the largest investment projects to take place in Bahrain in the past five years.[26]
In July 2023, Bahrain's national origin exports decreased by 23%, valued at BD323 million, while imports fell by 6% to BD441 million, resulting in a trade deficit of BD68 million, according to the Information & eGovernment Authority (iGA) report.[27]
Overall during 2023, Bahrain's GDP grew by 2.45%, with the non-oil sector showing a robust increase of 4.48%, indicating the country's successful efforts towards economic diversification.[28] The Bahrain Economic Development Board played a crucial role in enhancing Bahrain's investment climate, actively facilitating the entry of international investors and expanding the sectors open to 100% foreign ownership, including significant initiatives in the oil and gas sectors under certain conditions.[29]
Macro-economic trend
This is a chart of trend of gross domestic product of Bahrain at market prices estimated by the International Monetary Fund with figures in millions of Bahraini Dinars.
Year | Gross Domestic Product | US Dollar Exchange | Inflation Index (2000=100) |
---|---|---|---|
1980 | 1,354 | 0.377 Bahraini Dinars | 74 |
1985 | 1,609 | 0.377 Bahraini Dinars | 90 |
1990 | 1,867 | 0.377 Bahraini Dinars | 89 |
1995 | 2,552 | 0.377 Bahraini Dinars | 98 |
2000 | 3,408 | 0.377 Bahraini Dinars | 100 |
2005 | 6,004 | 0.377 Bahraini Dinars | 105 |
2010 | 9,668 | 0.377 Bahraini Dinars | 120 |
2015 | 11,675 | 0.377 Bahraini Dinars | 133 |
2020 | 13,058 | 0.377 Bahraini Dinars | 139 |
For purchasing power parity comparisons, the US Dollar is exchanged at 0.30 Bahraini Dinars only. Mean wages were $19.81 per man-hour in 2009.
The following table shows the main economic indicators in 1980–2022.[30]
Year | GDP
(in bil. US$ PPP) |
GDP per capita
(in US$ PPP) |
GDP
(in bil. US$ nominal) |
GDP growth (real) | Inflation (in Percent) | Government debt (in % of GDP) |
---|---|---|---|---|---|---|
1980 | 7.3 | 20,779 | 3.6 | 7.5 % | 3.8 % | ... |
1985 | 11.4 | 27,186 | 4.3 | −0.9 % | −2.4 % | ... |
1990 | 14.7 | 30,044 | 5.0 | 3.5 % | 1.3 % | 8 % |
1995 | 20.5 | 36,705 | 6.8 | 1.9 % | 3.1 % | 14 % |
2000 | 28.0 | 43,920 | 9.1 | 7.0 % | −0.7 % | 26 % |
2005 | 40.4 | 45,440 | 16.0 | 6.8 % | 2.6 % | 24 % |
2010 | 58.2 | 47,117 | 25.7 | 4.3 % | 2.0 % | 30 % |
2011 | 60.6 | 50,673 | 28.8 | 2.0 % | −0.3 % | 33 % |
2012 | 65.9 | 54,489 | 30.7 | 3.7 % | 2.8 % | 36 % |
2013 | 67.7 | 54,035 | 32.5 | 5.4 % | 3.3 % | 44 % |
2014 | 68.3 | 51,938 | 33.4 | 4.4 % | 2.6 % | 44 % |
2015 | 62.5 | 45,627 | 31.1 | 2.5 % | 1.8 % | 66 % |
2016 | 63.8 | 44,834 | 32.2 | 3.6 % | 2.8 % | 81 % |
2017 | 71.3 | 47,486 | 35.5 | 4.3 % | 1.4 % | 88 % |
2018 | 74.5 | 48,424 | 37.8 | 2.1 % | 2.1 % | 95 % |
2019 | 77.5 | 50,118 | 38.7 | 2.2 % | 1.0 % | 102 % |
2020 | 74.9 | 48,166 | 34.6 | −4.6 % | −2.3 % | 130 % |
2021 | 80.3 | 48,357 | 39.3 | 2.6 % | −0.6 % | 127 % |
2022 | 90.1 | 49,482 | 44.4 | 4.9 % | 3.6 % | 118 % |
Investment
The stock
Hydrocarbon industry
The
Bahrain's other industries include Aluminum Bahrain, which operates an aluminum smelter—the largest in the world with an annual production of about 1,500,000 metric tons—and related factories, such as the Aluminum Extrusion Company and the Gulf Aluminum Rolling Mill Company (GARMCO)[3]. Other plants include the Arab Iron and Steel Company's iron ore pelletizing plant (4 million tons annually) and a shipbuilding and repair yard.
Bahrain's development as a major financial center has been the most widely heralded aspect of its diversification effort. International financial institutions operate in Bahrain, both offshore and onshore, without impediments. In 2001, Bahrain's central bank issued 15 new licenses. More than 100 offshore banking units and representative offices are located in Bahrain, as well as 65 American firms. Bahrain's international airport is one of busiest in the Persian Gulf, serving 22 carriers. A modern, busy port offers direct and frequent cargo shipping connections to the U.S., Europe, and the Far East. Internationally recognised Bahraini companies include Investcorp, the venture capital firm credited with turning around the fortunes of Gucci.
Taxation
There is no personal income tax in Bahrain.
Employers and workers must pay social insurance contributions as follows:
(1) for old-age, disability and survivor protection: for Bahraini employees, since May 2022, employers pay 14% of salary plus constant allowances, the percentage will rise by 1% each year (up to 20% in 2028),[31] workers pay 7% plus constant allowances; for non-Bahraini employees, employers pay 3% of salary plus constant allowances (then being entitled only to employment injury benefits).
(2) for unemployment insurance: since June 1, 2007, all wages are subject to a 2% tax, paid for equally by the employer and the employee, applicable both to nationals and non-citizens and supplemented by a government contribution of 1%. This makes Bahrain the first of the
See also
References
Notes
- ^ "World Economic Outlook Database, April 2019". IMF.org. International Monetary Fund. Retrieved 29 September 2019.
- ^ "World Bank Country and Lending Groups". datahelpdesk.worldbank.org. World Bank. Retrieved 29 September 2019.
- ^ "Population, total - Bahrain". data.worldbank.org. World Bank. Retrieved 21 February 2020.
- ^ a b c d e f "World Economic Outlook Database, October 2023". IMF.org. International Monetary Fund. October 2023. Retrieved October 19, 2023.
- ^ a b c "MIDDLE EAST :: BAHRAIN". CIA.gov. Central Intelligence Agency. Retrieved 21 February 2020.
- ^ "The World Factbook". Retrieved 3 March 2015.
- ^ "Human Development Index (HDI)". hdr.undp.org. HDRO (Human Development Report Office) United Nations Development Programme. Retrieved 4 December 2022.
- ^ "Inequality-adjusted Human Development Index (IHDI)". hdr.undp.org. HDRO (Human Development Report Office) United Nations Development Programme. Archived from the original on 12 December 2020. Retrieved 4 December 2022.
- ILO. Retrieved 21 February 2020.
- ^ "Employment to population ratio, 15+, total (%) (national estimate) - Bahrain". data.worldbank.org. World Bank & ILO. Retrieved 21 February 2020.
- ^ "World Bank Open Data". data.worldbank.org. Retrieved 14 November 2020.
- CIA World Factbook. 2016. Archived from the originalon 2016-10-02. Retrieved 2018-03-09.
- CIA World Factbook. 2016. Archived from the originalon 2016-08-13. Retrieved 2018-03-09.
- ^ "Sovereigns rating list". Standard & Poor's. Retrieved 26 May 2011.
- ^ "The World Factbook". Retrieved 29 October 2019.
- ^ "10 Most Expensive Currency In The World - Latest News Online, News, Fresh News, Online News". Archived from the original on 25 February 2015. Retrieved 3 March 2015.
- ^ a b "Bahrain's economy praised for diversity and sustainability". Bahrain Economic Development Board. Archived from the original on December 28, 2010. Retrieved 24 June 2012.
- ^ Hedge Funds Review 18 March 2008
- ^ Gulf Daily News 18 March 2008
- ^ "Bahrain calling – Banking & Finance". ArabianBusiness.com. 25 April 2008. Retrieved 27 June 2010.
- ^ a b "CIA World Factbook, "Bahrain"". Cia.gov. Retrieved 25 January 2011.
- ^ "Bahrain Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption". www.heritage.org. Retrieved 2020-09-18.
- ^ Gwartney, James; Lawson, Robert; Hall, Joshua; Murphy, Ryan; Berggren, Niclas; McMahon, Fred; Nilsson, Therese (2020). "Economic Freedom of the World Annual Report" (PDF). fraserinstitute.org.
- ^ "Bahrain | Data". data.worldbank.org. Retrieved 2020-09-18.
- ^ "Middle East :: Bahrain — The World Factbook - Central Intelligence Agency". www.cia.gov. Retrieved 2019-09-23.
- ^ "Gulf Daily News » Business News » Jobs 'for generations to come'". Retrieved 3 March 2015.
- ^ "Bahrain-origin exports dip 23% to $848mln in July". Zawya. 2023-08-25. Retrieved 2023-08-31.
- ^ "Bahrain's Economy Records 2.45% Growth in Q3 2023". Gulf Insider. 2023-12-26. Retrieved 2024-04-10.
- ^ "Bahrain's development plans facilitate economic diversification".
- ^ "Report for Selected Countries and Subjects".
- ^ "Amendments to Social Insurance Law - Employee Benefits & Compensation - Bahrain".
Bibliography
- This article incorporates public domain material from The World Factbook (2024 ed.).
- This article incorporates public domain material from U.S. Bilateral Relations Fact Sheets. United States Department of State.
- Kingdom of Bahrain, Ministry of Labour Unemployment Insurance System. Accessed November 6, 2007.
External links
- Daily Star (Beirut), 6 January 2006, Bahrain's 'honesty' keeps its economy freest in region Archived 30 July 2009 at the Wayback Machine
- Gulf News, 7 January 2006, Bahrain ranked freest Arab economy
- Bahrain Economic Development at Curlie
- University of Bahrain Archived 2014-02-26 at the Wayback Machine
- map of oil and gas infrastructure in Bahrain [4] Archived 2021-12-05 at the Wayback Machine