Our comprehensive assessment of Bahrain's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Bahrain, as well as the latest industry developments that could impact Bahrain's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Bahrain before your competitors.

Country Risk

Bahrain Country Risk

BMI View:

Core Views

  • In light of record oil revenues and the weakness of private investment, we expect public spending to outperform over the coming quarters, which should support activity in the non-hydrocarbon economy. Efforts to address the shortage of affordable housing will see government CAPEX accelerate.

  • We do not believe that weaker oil prices will derail the Bahraini government's investment plans, ensuring a continued source of support for the country's economy. Real GDP growth will reach 3.8% in 2015 and 2016, compared to an annual average of 3.6% between 2009 and 2013.

  • Bahrain's reputation as a stable and welcoming location to do business in the Gulf has suffered as a result of the volatile political climate. At the moment, it remains to be seen if Manama will be able to compete with Doha and Dubai in attracting investment into the all-...

To read the full article Register for Free or Login

Bahrain Operational Risk Coverage (8)

Bahrain Operational Risk

BMI View:

The key risks to businesses entering Bahrain are the potential for disruption due to domestic unrest or region-wide conflict, the lack of a large domestic pool of skilled labour (necessitating the costly importation of skilled foreign workers), an overreliance on roads and gas with little in the way of alternative transportation or utilities options, and limited liquidity in the financial markets. However there are numerous benefits available for those investors who do enter the country, such as the lack of personal and corporate taxation, low levels of crime, very low labour costs, and a liberal approach to foreign investment. Due to the predominantly low risks facing incoming businesses, we have awarded Bahrain an overall score of 58.2 out of 100 in our Operational Risk Index. This leaves it in 5 th place regionally out of the 18 MENA states covered, and 52 st position globally out of 170 countries.

The greatest risk...

To read the full article Register for Free or Login

Bahrain Operational Risk

BMI View:

We have given Bahrain a score of 61.6 out of 100 in our Trade and Investment Risk Index. This places the Kingdom in third position in the Middle East and North Africa (MENA) region, out of the 18 countries covered - behind only the UAE and Qatar. Globally, Bahrain comes in above Barbados and Macedonia, but falls below Italy and Japan. Despite the constraints imposed by its small population (totalling only 1.2mn, including expatriate workers), Bahrain offers attractive opportunities to foreign investors.

Bahrain performs relatively well in terms of Economic Openness, for which it scores 51.7 out of 100 and comes in seventh position regionally. The government has a liberal approach to foreign investment, and is home to a large financial services sector. Developing the service economy has been a top priority for the government - given Bahrain's relatively small oil reserves - and the financial services sector has emerged as a major driver of...

To read the full article Register for Free or Login

Bahrain Crime & Security

BMI View:

Bahrain is generally a safe place for foreign business travellers, expatriate workers, and tourists, but the country's image of stability has been shaken by the political upheaval that began in February 2011. Anti-government protests are now a frequent occurrence, and while these are not targeted at foreigners, they could serve as a deterrent to investment. Meanwhile, there is also a risk that foreign visitors could fall victim to a terrorist attack, even if they are not the intended target. Certainly, the political unrest has been highly disruptive to business activity, given that protests have taken place in the heart of the capital Manama, which is a very compact city. Overall, we score Bahrain 48.7 out of 100 for its Crime & Security risk, placing the country sixth in the Middle East and North Africa (MENA) region.

Moreover, given the vast gap between the wishes of the Sunni elite and the demands of the Shi'a majority, who want...

To read the full article Register for Free or Login

Bahrain Labour Market

BMI View:

With a sizeable labour force, comprised predominantly of cheap expatriate workers, good life expectancy and strong urbanisation on the one hand, and low labour costs and regulations on the other, Bahrain's labour market offers limited risks to investors. What risks there are stem from the limitations of the education infrastructure, with a low number of higher education graduates hampering the overall size of the skilled labour pool. We have given Bahrain an overall Labour Market Risk score of 58.7 out of 100. This puts the country in third place across the Middle East and North Africa (MENA) region, behind only Israel and Qatar and ahead of most of its peers in the Gulf Cooperation Council (GCC). At the global level, Bahrain is in 44th position - just behind Malaysia, but ahead of countries including Hungary, Turkey and Mexico.

This high score owes a lot to Bahrain's strong performance in our Availability of Labour rankings, where the...

To read the full article Register for Free or Login

Bahrain Logistics

BMI View:

Bahrain boasts a developed logistics network, which caters not only for domestic demand, but is increasingly playing a role in its neighbour Saudi Arabia's supply chain. It is therefore a regional outperformer in BMI's Logistics Risk Index scoring 63.7 out of 100 and ranking in third position behind the UAE and Israel. However the major risk to the country's supply chains is its reliance on one area. This is an issue in the transport sector - with the Kingdom reliant on road to meet its logistics demand, and in the utilities sector - with Bahrain's power sector dominated by one fuel, gas. The heavy dependence on one mode of transport or one fuel type heightens risk, as should this area be disrupted operations would be negatively impacted as there are no diversification options.

Bahrain's strong export and import growth has resulted its top score of 70.4 out of 100 for Market Size And Utilities, which places it third...

To read the full article Register for Free or Login

Bahrain Industry Coverage (16)

Autos

Bahrain Autos

BMI View:

New car sales have seen impressive growth in Bahrain year-to-date, rising by a reported 22% over H114, to 31,608 units. Given the positive start to 2014, we have decided to make an upwards revision to our 2014 sales forecast. BMI is now forecasting 14.5% growth in 2014, up from the previous forecast of just above 7%. This will take full-year new vehicle sales to around 63,298 units.

BMI's positive view on the near-term outlook for the Bahraini economy underpins our upbeat stance. Our Country Risk team is currently targeting 3.4% real GDP growth for 2014, rising to 3.8% in 2015 and 2016. In particular, we feel that Bahrain's economic growth will remain driven by the non-hydrocarbon sector heading into 2015, with supportive fiscal policies and progress on government-backed infrastructure projects helping to balance still-restrained business activity.

The country's...

To read the full article Register for Free or Login

Commercial Banking

Bahrain Commercial Banking

BMI View:

...
Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

To read the full article Register for Free or Login

Consumer Electronics

Bahrain Consumer Electronics

BMI View:

BMI View:   Bahrain's consumer electronics market is one of the smallest in the region, reflecting the size of the population. Consequently devices are largely distributed via regional hubs, as it is not cost effective for global vendors to have a local presence. However, despite its small size there are considerable opportunities in Bahrain due to high per capita incomes and the propensity of the local population to purchase consumer electronics equipment. Smartphones and tablets are currently the fastest-growing device categories in the market, although big-ticket items such as LED and 3D TV sets also contribute to the market's expected expansion. While there are many positive aspects to Bahrain's market, it should be noted that continuing civil unrest and an unstable political outlook pose potential downside risks to our forecasts for the sector's growth.

Headline...

To read the full article Register for Free or Login

Food & Drink

Bahrain Food & Drink

BMI View:

BMI View:   Despite some downside risks, we maintain our positive outlook on food consumption growth in Bahrain throughout the forecast period. We forecast food consumption growth in local currency terms falling only slightly from the 6.4% forecast for 2014, supported as it is by strong growth in the mass grocery retail sector. Real GDP growth of 3.4% in 2014 is expected to be exceeded in 2 015 and 2016 with growth of above 4 % forecast for both years. However, employment and wage growth have slowed in recent months and are yet to show signs of improvement.  

Headline Industry Data (local currency)

  • Food consumption growth for 2014: +6.4%; compound annual growth rate (CAGR) 2013 to 2018: +6.2%.

  • Per capita food...

To read the full article Register for Free or Login

Freight Transport

Bahrain Freight Transport

BMI View:

Bahrain continues to invest heavily into making itself a key logisitics centre in the Gulf. The primary port, the Khalifa Bin Salman Port (KBSP) is to have its channel deepened, and the Bahrain International Airport is to be expanded. We question whether the small island state can compete with the investment that has already been put into making Dubai a logistics hub for the region; however, Bahrain has succeeded in attracting new logistics companies to its territory over the past 12 months, and we forecast healthy growth across its freight modes over our medium-term forecast period.

Headline Industry Data

  • Growth at the port of Khalifa bin Salman (KBSP) in terms of total tonnage throughput is forecast at 6.0% in 2014, with average annual growth forecast at 5.5% between 2014 and 2018.

  • Growth in Bahrain International Airport tonnage handling forecast at...

To read the full article Register for Free or Login

Information Technology

Bahrain Information Technology

BMI View:

BMI View:   G rowth in 2014   was squeezed by the political instability that has been an undercurrent in Bahrain since the Arab Spring, and we believe it could continue to be a drag on growth in 2015, with downside risk should the situation deteriorate. However, there are positive characteristics that should result in medium term growth in IT market spending. Favourable population dynamics, investments in retail and data network infrastructure, government ICT initiatives and the country's expanding financial hub status are expected to be major drivers of growth in Bahrain's IT market. We also point to significant opportunities in the...

To read the full article Register for Free or Login

Infrastructure

Bahrain Infrastructure

BMI View:

BMI View : We forecast that up to 2018, real growth in Bahrain's construction industry will average 3.6% , buoyed by government investment in infrastructure and social housing. While this is an improved outlook on a year ago, there is no end in sight to Bahrain's protracted political crisis and we see little chance of a rapid   construction industry recovery. Persistent political uncertainty will likely see private sector investment into new projects remain weak when there are more attractive opportunities elsewhere in the Gulf region .

Key...

To read the full article Register for Free or Login

Insurance

Bahrain Insurance

BMI View:

BMI View :   The Bahrain insurance market will continue to see strong growth in the coming years in line with our outlook for economic growth to remain steady. The growth in premiums will be lead by the non-life segment, which will benefit from the country's compulsory health insurance law. However, we see profitability for non-life insurers remain under pressure due to the intense competition within the fragmented segment.

After growing 6.6% in 2014, we forecast growth in gross premiums to pickup to 7.0% in 2015. This increase will be on the back of stronger growth in both the life and non-life segments as economic growth accelerates. The takaful sector represented around 22% of total gross premiums in 2013 and according to the regulator has seen impressive growth over the past decade. Going forward, we expect the...

To read the full article Register for Free or Login

Metals

Bahrain Metals

BMI View:

BMI View: Bahrain will become a major aluminium exporter in the coming years as Aluminium Bahrain expands output significantly. Consumption growth will increase given substantial investment plans but still be unable to keep pace with output.

We expect Bahrain to become a major exporter of aluminium in the Gulf region over the coming years. Aluminium Bahrain's significant expansion plans will push output to 1.4mnt in 2018, from 900kt in 2013. Consumption growth will push significantly higher as the government and private sector embark of an infrastructure building programme. Overall, however, we expect Bahrain's surplus of aluminium to grow from 410kt in 2013 to 725kt in 2018. We expect this excess capacity to be exporter to Saudi Arabia and the United Arab Emirates, both of which will experience a deficit in aluminium...

To read the full article Register for Free or Login

Oil & Gas

Bahrain Oil & Gas

BMI View:

BMI View: Despite limited success in boosting oil and gas production from the Bahrain field, the key development for the country will be the refining capacity expansion at the Kingdom's centrepiece Sitra refinery. However, delays to the expansion will result in a continuation of fuel export declines and widening fiscal deficit until 2020. This marks a two year delay to our previous forecast which saw increasing fuel exports from 2018. Other plans envisage the construction of a liquefied natural gas (LNG) receiving terminal, although this is still a long way from realisation.

Headline Forecasts (Bahrain 2012-2018)
  2012 ...

To read the full article Register for Free or Login

Pharmaceuticals & Healthcare

Bahrain Pharmaceuticals & Healthcare

BMI View:

BMI View:   Bahrain ' s pharmaceutical market ou tlook over the medium- and long- term remain bullish despite recent price cuts made to a v ariety of medicines across the country ,   contributing to only moderate growth in the short term. Longer term, t he country ' s ageing population, increasing chronic diseases bu rden and robust economic growth will drive medicine demand; h owever, further medicine price cuts, lower-than-expected oil prices in coming years and failure to find a lasting solution to the political crisis present challenges that will...

To read the full article Register for Free or Login

Real Estate

Bahrain Real Estate

BMI View:

BMI View: Bahrain ' s commercial real estate sector is witnessing stagnant growth as a dip in economic output, political instability and an overhanging supply of commercial space com bine to keep rental rates down. T he country has a number of large-scale commercial projects under development, including the flagship Bahrain Bay project.

A dip in economic growth over 2014 saw rental rates stagnate across much of Bahrain's commercial real estate landscape. Falling oil revenues, a contributor to overall GDP, fell as a result of declining crude prices globally, while other sectors, such as manufacturing failed to pick up the slack by showing only moderate growth.

In the office sector the market continued to feel the lingering effects of the global financial crisis, with high vacancy...

To read the full article Register for Free or Login

Retail

Bahrain Retail

BMI View:

BMI View:   The increasing affluence of the Bahraini consumer, together with growing brand awareness and a forecast rise in real private consumption growth, will lead to increased household spending on the retail sector over our forecast period. This will particularly benefit personal care, communications, clothing & footwear and furnishing & home retailers, although we expect housing & utilities expenditure to remain by far the highest throughout our forecast period.

Forecasts for household spending and headline total spending across each retail subsector between 2015 and 2018 are provided in BMI's Bahrain retail report. Our projections also cover household income and employment, demographic forecasts, and a detailed breakdown of household and per capita spending across a large number of retail areas. These include food & drink,...

To read the full article Register for Free or Login

Shipping

Bahrain Shipping

BMI View:

Bahrain's main maritime facility, the Khalifa bin Salman port, is set to continue posting solid growth figures in 2014, especially in terms of container throughput. Volumes at the facility are rising as a result of the massive hike in demand at Saudi Arabian ports.

Our outlook for the facility is a reflection of our forecasts for the Bahraini shipping industry as a whole. The country's domestic consumer demand outlook bodes well for its ports sector over the medium term. The port of Mina Salman should see tonnage volumes rise as well, on the back of demand from an extensive housebuilding programme under way in Bahrain.

Headline Industry Data

  • Growth in KBSP total tonnage throughput is forecast at 14.7% in 2014, with average annual growth of 11.8% between 2014 and 2018.

  • Growth in KBSP container throughput is forecast at 7.6% in...

To read the full article Register for Free or Login

Telecommunications

Bahrain Telecommunications

BMI View:

BMI View : There remains some growth potential Bahrain's mobile market, but the key opportunities in the country's telecoms market now lie in the advanced mobile and wireline data market s . This is supported by strong consumer appetite for data services as well as operators ' heavy investments in 4G LTE and 100Mbps fibre networks. As well as encouraging continued take-up of 3G and 4G, telecoms operators are   also increas ing their focus on improving subscriber mixes and...

To read the full article Register for Free or Login

Water

Bahrain Water

BMI View:

BMI View:  Overall little has changed in the Bahrain water sector; however, we have upgraded our forecasts following the release of new historical data. We anticipate that the need for greater water security and more efficient distribution infrastructure will continue to be the key issues facing the water services sector, yet the subdued project pipeline and the difficulties in obtaining financing will offer minimal opportunities for water infrastructure groups.

The privatisation of the water sector has been on the agenda in Bahrain for several years. This privatisation takes place in the context of an improvement of the overall investment climate in Bahrain, with domestic economic conditions gradually showing signs of improvement after little growth in the last two years. The country's Electricity and Water ministry is actively seeking bilateral partnerships with counties including France...

To read the full article Register for Free or Login