StartBahrain Today Bahrain's GDP to jump $2,000 to reach more than $23,000
Bahrain's GDP to jump $2,000 to reach more than $23,000
Gulf Daily News - 24/8/2007 - MANAMA- Bahrain's Gross Domestic Product (GDP) will jump $2,000 this year to reach more than $23,000 per head of population, according to the latest figures from top think-tank the Economist Intelligence Unit (EIU). This year's forecast figure of $23,072 is up more than $2,000 from last year's $20,944 per head and is one of a number of boosts for Bahrain contained in the latest EIU country briefing compiled by the organisation's experts.
The briefing looks ahead as far as 2011 and predicts an increase in Bahrain's population and visitor numbers, as well as growth for the country's retail and telecommunications sectors over that period.
GDP is forecast to rise from last year's estimate of $15.5 billion to $20.5bn by 2011 - a growth of $5bn and 31pc in just five years.
However, it also warns that Bahrain will face strong competition from Dubai in some areas, and if political developments or a fall in oil prices force a slowdown, the kingdom could be left with the problem of over-supply in several sectors.
Bahrain's rising GDP is forecast to hit $24,400 by 2011, underpinned by a strong retail sector supported by the country's large numbers of expatriates.
"The tourism sector is likely to continue to expand strongly over the forecast period as a number of large private sector tourism developments are opened," the briefing's authors note.
The study also forecasts growth in Bahrain's telecommunications sector, with new telecoms likely to begin operations in a market where there is "still considerable room for growth".
"Only 10pc of the population currently has access to broadband Internet and there is strong potential for these services to grow," it adds.
Such developments will be supported by a growing population as "robust economic growth" attracts a rising number of expatriate workers willing to work for less than the wages expected by nationals. The rise in foreign workers could take place against a backdrop of skilled Bahraini nationals migrating to other G.C.C. countries for higher salaries.
The fact that 69pc of expatriates in Bahrain are male has resulted in a "skewed" ratio of men to women in Bahrain, and men now constitute 58pc of the total population.
The briefing's authors say the expanding economy will help cut levels of unemployment, but warns "the continued reluctance of Bahrainis to work in a variety of private sector positions often considered to be menial will be difficult to overcome".
The EIU places unemployment in Bahrain at 14pc, but Bahrain's government says its National Employment Programme slashed unemployment levels from 16pc when it was begun last year to 3.7pc when it was officially wound up last month.
Political and social reforms such as a more representative parliament and changes to sponsorship regulations to make it easier for expats to change jobs have already boosted Bahrain's overall score in the EIU's business environment rankings from 7.1 to 7.43, the study shows.
However, the strong competition faced by Bahrain in a region of nascent economies is underlined by the fact that it is forecast to fall to fourth place - behind Israel, Qatar and the UAE - in terms of market opportunities in the 2007-2011 period, having only trailed the UAE from the previous 2002-2006 study period.
The briefing also raises the spectre of over-supply in the event of an economic downturn.
"Question-marks hang over the sudden emergence of so many new hotels and retail centres in a country with only 742,561 residents at the end of 2006, despite the relatively rapid growth in tourist numbers.
"Should regional political developments cause a slowdown, or even fall, in tourist numbers - or oil prices decline more sharply than envisaged - there is a risk the country will be left with substantial spare capacity," it notes.
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