Country Forecast Bahrain Updater

  • ID: 2101432
  • January 2016
  • Region: Bahrain
  • 17 Pages
  • The Economist Intelligence Unit
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Bahrain will face persistent social unrest throughout the forecast period, and bomb attacks on security personnel are likely. The position of the ruling Al Khalifa family will remain secure in the short term. However, sectarian tensions between the Shia majority and the ruling Sunnis will persist, heightened by a mistrust of Iran, which is considered a threat to the regime. The threat of attacks by the jihadi group Islamic State (most probably on Shia mosques) will also add to these divisions, and security will tighten as a result in the short to medium term.

Policymaking will remain concentrated in the hands of the government, which is dominated by the ruling family. Political effectiveness will be constrained by opposition from the elected parliament and by the weakness of the price for oil (which generates around 80% of government revenue). Despite opposition, there will be some progress in reforming the extensive subsidy system (albeit only gradual) given the fall in oil prices. Meat and fuel subsides have been reduced and other subsidies are also likely to be cut eventually.

Government efforts to boost the local skills base and narrow the cost gap between expatriates and locals will have some impact, but these efforts will be constrained by the tightness of the public finances and the private sector's reliance on expatriate labour. Issues of demographics and naturalisation will remain politically sensitive, owing to fierce controversy over citizenship rules, which opposition groups allege are politicised.

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Country Forecast Bahrain Updater

Country forecast overview: Highlights

Country forecast overview: Key indicators

Country forecast overview: Business environment rankings

Country forecast overview: Bahrain's business environment at a glance
Policy towards private enterprise and competition
Policy towards foreign investment
Foreign trade and exchange controls
The labour market

Fact sheet

Outlook for 2016-20: Political stability

Outlook for 2016-20: Election watch

Outlook for 2016-20: International relations

Outlook for 2016-20: Policy trends

Outlook for 2016-20: Fiscal policy

Outlook for 2016-20: Monetary policy

Outlook for 2016-20: Economic growth

Outlook for 2016-20: Inflation

Outlook for 2016-20: Exchange rates

Outlook for 2016-20: External sector

Data summary: Global outlook

Data summary: Gross domestic product, current market prices

Data summary: Gross domestic product, at constant prices

Data summary: Gross domestic product by sector of origin

Data summary: Growth and productivity

Data summary: Economic structure, income and market size

Data summary: Fiscal indicators

Data summary: Monetary indicators

Data summary: Employment, wages and prices

Data summary: Current account and terms of trade

Data summary: Foreign direct investment

Data summary: External debt

Data sources and definitions
Global data
Domestic data

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