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

  • External financing from the rest of the GCC will help to shield the Bahraini non-oil sector from the ongoing retrenchment in public spending. Despite the negative impact of subsidy cuts on internal demand, we forecast Bahrain to grow at a relatively robust rate of 2.9% this year and 2.6% in 2017.

  • 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-important hospitality and financial services industry.

  • The economy's medium-term outlook remains contingent upon a lasting solution being found to the current political crisis. Unfortunately, we maintain our guarded outlook on the prospects that the...

Bahrain Operational Risk Coverage (8)

Bahrain Operational Risk

BMI View:

BMI View: Bahrain suffers from a lack of skilled and suitable labour, due to poor educational standards and a small population. The country's significant levels of public unrest contribute to a considerable risk of violence and conflict, while its cybersecurity infrastructure remains underdeveloped. However, with strong availability and low costs of utilities, and highly receptive trade and investment environment, Bahrain is one of the cheapest places in the world to set up certain business ventures. Therefore, with a score of 63.4 out of 100 on BMI's Operational Risk Index, Bahrain is ranked...

Bahrain Operational Risk

BMI View:

BMI View: Bahrain performs well in comparison to its regional peers in terms of its general trade and investment environment. While the country's economic performance does hinder its overall appeal as a trading destination, it is elevated by minimal trade tariffs, friendly policies towards foreign investors and key free trade agreements with strategic partners. Further incentives for Bahrain as a trade and investment destination are its low tax rates, fast and efficient tax system, as well as relatively low levels of red tape. While corruption levels in its legal system have reduced over the past few years, recent reports do call into question how independent the country's judiciary is - although this is...

Bahrain Crime & Security

BMI View:

BMI View: Bahrain is a relatively stable and secure country in a notoriously unstable region. Boasting a competent policing infrastructure, Bahrain's crime rates are low. Simultaneously, a developed financial sector and oversight mechanisms mitigate risks of financial crime. However, underdeveloped cybersecurity policies, and a simmering domestic conflict over democratisation present significant threats to businesses. As a result, Bahrain receives a score of 65.1 out of 100 for its overall Crime and Security Risk, placing it fifth in the Middle East and North Africa (MENA) region.


Bahrain Labour Market

BMI View:

BMI View: Businesses operating in Bahrain will need to consider importing foreign workers due to the country's small population and the lack of educational and vocational skills in the domestic labour market. In addition, companies are facing increasing difficulties employing expatriates due to the implementation of policies intended to encourage the hiring of domestic labour at the expense of foreign workers. Nevertheless, firms which are able to absorb the cost of importing workers will face an attractive labour market in Bahrain, characterised by flexible regulations, low wages and minimal unionisation. Overall, Bahrain scores 60.7 out of 100 in BMI's Labour Market Risk Index, placing the country in fifth position out of...

Bahrain Logistics

BMI View:

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. 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 country reliant on road networks 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...

Bahrain Industry Coverage (24)


Bahrain Autos

BMI View:

Passenger Car and Light Commercial Vehicle Sales
e/f = BMI estimate/forecast. Source: CIO, BMI

Key Views

  • 2015 has proved another positive year for Bahraini new car sales, which should be on track for over 70,000 units sold by year end.

  • Looking forward, BMI remains optimistic on the medium-term outlook for the sector, targeting 21.3% growth, to around the 87,000 unit mark by 2019.

  • One support to overall passenger car sales numbers as we...

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

Consumer Electronics

Bahrain Consumer Electronics

BMI View:

BMI View: Bahrain is a high-income country, making it a lucrative market for consumer electronics vendors, even as overall market size is limited by the small population. Premium vendors fare particularly well in Bahrain, where over 56% of households are forecast to have incomes of USD50,000 or more in 2016 and there is a strong culture of fashion oriented conspicuous consumption. There are however challenges for vendors operating in Bahrain, most notably the maturity of the devices market, with high penetration even in newer device categories such as smartphones and tablets, requiring vendors to apply targeted strategies due to an absence of 'low-...

Food & Drink

Bahrain Food & Drink

BMI View:

BMI View: Bahrain's food and drink industry will be one of the region's fastest growing. We forecast positive growth for the industry led by rapid growth in the MGR sector, with a CAGR of 7.4% to 2019. Strengthening economic growth and a stabilising political crisis in Bahrain will restore investor confidence. Furthermore, a business-friendly environment coupled with cheap electricity and fuel prices will lower overheads and costs to encourage growth in the food and drink industry.


Freight Transport

Bahrain Freight Transport

BMI View:

BMI View: Bahrain will continue to follow an ambitious infrastructure investment plan in order to increase capacity within its key freight sectors. This falls in line with the government's strategic vision for 2030, which will aim to promote trade in the region and stimulate economic growth. The measures will contribute to steady growth across its freight modes over the medium term to 2020, with the road transport sector in particular benefitting from infrastructure investment and industry diversification in the country.

Real growth in GDP looks set to slow marginally in 2016, though oil prices are starting to recover slightly from recent drops. Healthy growth in the non-oil sector will have a positive impact on freight transport as demand from other...

Information Technology

Bahrain Information Technology

BMI View:

BMI View: The decline in the oil price has dampened the economic outlook for Bahrain since the last IT market update, reflected in our downward revision of our forecast to a CAGR of 4.9% 2016-2019 to a total value of BHD154mn. The impact will not however be far reaching under our core scenario, with Bahrain's status as a lucrative retail hardware market largely unaffected, and we maintain our view that premium device spending will provide high margin unit growth opportunities over the medium term. Meanwhile, in terms of enterprise spending growing demand from the financial services and telecommunications verticals, particularly for cloud computing and advanced solutions will offset the cutbacks in the oil and gas sector. There is however heightened downside risk in the 2016 update, primarily through the potential for public sector IT spending...


Bahrain Infrastructure

BMI View:

BMI View : Bahrain saw an uptick in construction over late 2014 and growth for the year came in higher than forecast, at a robust 7.3%. Growth prospects for 2015 and 2016 are more subdued, as government spending comes under increasing pressure from falling global oil prices and private investor interest remains hampered by ongoing political insecurity. The key focus remains on residential construction as Bahrain addresses the shortfall in social housing capacity, as well as transport infrastructure, particularly connections with neighbouring Saudi Arabia. These developments remain heavily reliant on external funding and as the GCC investment programme slows we expect growth in Bahrain's construction sector to...


Bahrain Insurance

BMI View:

BMI View: Despite headwinds from general economic weakness triggered by low oil prices, Bahrain's resilient insurance sector will continue to grow at 6-7% in both the life and the non-life sector. Well-developed by regional standards, the insurance market remains small by global standards. Health insurance is likely to be the key outperformer, with growth of 9-10% for the foreseeable future driven by key regulatory changes mandating health cover for expatriates as well as Bahrainis.

Headline Insurance Forecasts (Bahrain 2012-2019)
Indicator 2012 2013

Medical Devices

Bahrain Medical Devices

BMI View:

BM I View: Bahrain is a small but technologically advanced market, which ranks sixteenth in the Middle East & Africa (MEA) region. The market will continue to rely on imported medical devices. Population growth, a changing epidemiological profile, increasing health expenditure and healthcare infrastructure developments are contributing to market growth, despite mounting fiscal pressures due to lower oil prices.

Projected Medical Device Market 2014-2019
Total (USDmn) Per Capita (...


Bahrain Metals

BMI View:

BMI View: We have increased our 2016 tin price forecast to USD16,500/tonne owing to a stabilisation in the Chinese economy over Q116 that has boosted all industrial metal prices significantly over January-April. While we expect consolidation over the remainder of 2016, tin prices will continue to recover beyond 2016 as the global market posts sustained market deficits and inventories dwindle.

Global - Tin Supply, Demand & Price Forecasts
2014 2015e 2016f ...

Bahrain Metals

BMI View:

BMI view: We have revised our aluminium price forecast from USD1,575/tonne to USD1,600/tonne in 2016, as the tightening market provided an earlier than expected floor in Q116. Aluminium prices will gradually edge higher as the global market moves into a deficit by 2018.

Global - Aluminium Supply, Demand & Price Forecasts
2014 2015e 2016f 2017f

Bahrain Metals

BMI View:

BMI View: Nickel prices will bottom in 2016 as weak production drags the global market into deficit. For instance, we expect Chinese imports of nickel to grow over the coming quarters. Prices will begin 2016 weaker than we had previously expected and we have thus revised down our 2016 average price forecast to USD9,000/tonne from USD10,500/tonne.

Global Nickel Forecasts
2013 2014 2015e

Bahrain Metals

BMI View:

BMI View: We have revised down our average copper price forecast for 2016 to USD4,900/tonne. We expect prices to find a floor over the first half of 2016, and begin to stabilise thereafter, supported by production cuts and modest consumption growth.

Global - Copper Supply, Demand & Price Forecasts
2014 2015e 2016f 2017f 2018f ...

Bahrain Metals

BMI View:

BMI View: We have raised our gold price forecast for 2016 to USD1,275/oz and have a new five-year price target of USD1,400/oz. We have turned more positive towards prices due to rising inflation pressures and our view that real rates will remain depressed in developed markets beyond 2016. A modest rise in prices will be insufficient to reverse the trend of weak mine investment and industry consolidation.

BMI Gold Forecasts
2014 2015 2016f ...

Bahrain Metals

BMI View:

BMI View: Global steel prices will remain subdued due to a persistent steel oversupply over the coming quarters. From 2017 onwards, steel prices will gradually edge higher as the global steel surplus will narrow due to Chinese supply moderation.

Steel Price Forecast
2014 2015 2016f 2017f 2018f 2019f...

Bahrain Metals

BMI View:

BMI View: We maintain our average zinc price forecast for 2016 of USD1,750/tonne. We expect zinc prices to reach a floor over the first half of 2016, and begin to stabilise thereafter, as production cuts shift the market to a deficit.

Global - Zinc Supply, Demand & Price Forecasts
2014 2015e 2016f 2017f 2018f

Bahrain Metals

BMI View:

BMI View: Lead prices will gradually edge higher as the global lead market will shift into deficit by 2017 as production growth will slow over the coming years.

BMI Lead Price Forecast
Current* 2016f 2017f 2018f 2019f 2020f

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 a widening of the country's fiscal deficit until 2020. This marks a two-year delay to our previous forecast which saw increasing fuel exports from 2018.


Pharmaceuticals & Healthcare

Bahrain Pharmaceuticals & Healthcare

BMI View:

BMI View: Bahrain's pharmaceutical market will experience slight growth in 2016 as a result of medicine price cuts implemented in late 2015. The country's rising prevalence of lifestyle-related diseases and the uptake of compulsory health insurance will provide strong opportunities for multinational pharmaceutical companies in the coming years. Innovative drug companies will show increasing interest in the region for sales of high-value products for the treatment of chronic diseases such as diabetes. However, rising healthcare costs and lower oil prices impacting government revenues will lead to cost-containment measures focussed on the healthcare and pharmaceutical sectors.

Headline Expenditure Projections

  • ...

Real Estate

Bahrain Real Estate

BMI View:

BMI View : The country's economic dependence on the hydrocarbon sector has created challenges for Bahrain's commercial real estate sector, considering the precipitous drop in commodity prices. However, we expect rental rates to remain fairly stable for 2016 across each of the sub-sectors we cover, as demand for retail and office space rises.

Bahrain is a small island nation with a population of just over 1mn. The Gulf state is regarded as one of the most prosperous Middle Eastern countries, with an increasingly affluent population, a successful financial sector and improved economic diversity as a result of governmental structural reforms. However, the hydrocarbons industry remains important to the economy, with most of that sector in Bahrain now involved in refining and other areas, as Bahrain now produces only about 48,000 barrels per day. Bahrain thus...


Bahrain Retail

BMI View:

BMI View: The Bahrain retail industry is one of the most prosperous in the world, boosted by an affluent and urban population (which is expected to grow in size due to an increased number of expats) and an increase in the level of income on the back of economic growth. Shopping centres are common in the capital of Manama, and the population is familiar with modern retail formats and informed on international brands. More shopping complexes are expected to be built in the future to support the growing demand. The food and drinks sector is less mature and has much room to grow, and retailers have a chance to establish themselves in this growing sector.

Bahrain's economy is expected to increase at a strong rate and reach USD45bn by 2019, seeing an increase of USD10bn from its level in 2015. Though the increase is impressive, it is not, in absolute terms, in the same league with some of its...


Bahrain Shipping

BMI View:

We expect Bahrain to continue develop its role as a regional transhipment hub over the remainder of 2015 and into 2016, with strong container and tonnage throughput growth at Bahrian's premier maritime facility, the Khalifa bin Salman Port (KBSP), forecast to continue. However, growth rates are forecast to slow: from 18.2% to 11.6% for box throughput and from 13.2% to 3.3% for tonnage throughput, with the latter fall attributed to the ongoing slump in oil prices.

Over the medium term, Bahrain's shipping sector will continue to rely on transhipment as a source of growth. We forecast average growth rates of 11.7% for tonnage and 5.1% for container throughput at the port over the next five years, which is a decrease since the uptick after 2011. Slowing growth will be due to limited variety in terms of export goods. However, we do believe that KBSP has a chance to take on the role of a smaller inter-regional rather than...


Bahrain Telecommunications

BMI View:

BMI View : Despite several risks to economic growth and investment that include ongoing political instability and weak oil prices, Bahrain's mobile and wireline telecoms sectors continue to display healthy levels of competition and measurable benefits for telecoms customers. Bahrain still generates the second most attractive returns for operators in the Middle East and North Africa region. The ability to offer fixed and mobile services means that the country's three mobile operators can offer bundled services including triple-play and quadruple-play services. Investment in next-generation access technologies, such as fibre-to-the-x, will meet the growing demand for high-speed connections. However, we...


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 and...

Latest Bahrain Articles

  • With global growth continuing to stutter amid unconvincing growth performan...

  • A few key themes stand out when comparing BMI's forecasts against Bloomberg...

  • We have upgraded our oil price forecast this month with markets having pric...

Latest Bahrain Blogs

  • The tentative rapprochement between Iran and the US, which began in the sec...

  • The Middle East is at a critical juncture. The anticipated nuclear deal bet...

  • Four years after the start of the Arab Spring, the prospects for much of th...

Latest Bahrain Podcasts

  • As a decade of rising oil prices comes to an end, OPEC's decision to l...

  • The rise of jihadist group Islamic State (IS) in Syria and Iraq poses ...

  • The market for pharmaceuticals in the oil-rich Gulf States is rapidly ...


Download PDF

By submitting this form you are acknowledging that you have read and understood our Privacy Policy.

Thank you for your interest

You will shortly receive your free executive summary by email.