Bahrain economy looking up

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MANAMA: Multiple advantages that should help Bahrain become an attractive post-pandemic investment destination, have been highlighted in a new report by the Oxford Business Group.

In its Covid-19 Recovery Roadmap for the kingdom, the global research and advisory company that produces business intelligence on 35 countries, has listed pro-business regulations, low operational costs, human capital, strong international connectivity and close proximity to and relations with Saudi Arabia, as key attributes that give the country an edge.

The report says Bahrain entered the Covid-19 pandemic with the most diversified economy in the GCC, which meant it was less susceptible to the sharp drop in international oil prices.

The country also benefits from some of the lowest operational costs in the region.

This, combined with supportive measures implemented by the government and the central bank, helped businesses maintain continuity.

The Oxford Business Group (OBG) says Bahrain, being an open and largely trade dependent economy due to a relatively small domestic market, was vulnerable to the sudden disruption to global supply chains that occurred at the outset of the pandemic.

However, the country’s diversified export portfolio helped cushion against lower levels of demand in many segments and this diversity is expected to be an asset in the recovery phase.

Citing a survey conducted by the Bahrain Chamber, GDN reported on Monday that the kingdom’s business community is upbeat about the economic outlook, with 95 per cent of merchants expecting to overcome the repercussions of the Covid-19 pandemic within two years.

The kingdom’s main business association also found that that nearly three out of four (71pc) business owners are optimistic about their prospects for the next two to three years.

Another report in the GDN last week said Bahrain’s hotels witnessed high occupancy levels in May 2021 beating the performance of some countries in the Middle East.

Amidst increasing signs that a regional recovery is underway, the Institute of Chartered Accountants in England and Wales estimates the kingdom’s real GDP growth at around three per cent this year, making it the fastest growing economy in the Middle East.

Meanwhile, reviewing Bahrain’s handling of the pandemic, the OBG report says the kingdom developed an advanced and effective health-care system in the years prior to the pandemic marked by strong synergies between the public and private sector.

These efforts facilitated a robust health care response with free testing and treatment provided to all citizens and residents.

The report adds that the country’s advanced Covid-19 testing and treatment capabilities, combined with an accelerated public vaccination programme have kept Bahrain’s Covid-19 fatality-case rate significantly below the global average while enabling the country to ease restrictions on mobility and kick-start vital service industries.

OBG notes that Bahrain’s policymakers have remained committed to the Fiscal Balance Programme which aims to create a sustainable equilibrium between public expenditure and revenue,

With this in mind, the consultancy says the private sector will have a vital role to play in driving the economic recovery, aided by government incentives.

The report was produced in collaboration with the Bahrain Development Bank, the Supreme Council for Women, Silah Gulf and Ebdaa Bank for Microfinance.

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