Bahrain’s GDP set to double in 2022 on high oil: ICAEW

Bahrain’s GDP set to double in 2022 on high oil: ICAEW

Bahrain - Boosted by rising oil prices and increasing oil production, Bahrain’s short-term economic outlook remains positive, leading to a much higher GDP growth forecast of 4.4% for 2022, double the pace in 2021, a report said.

According to the latest Economic Insight report for the Middle East, commissioned by ICAEW and compiled by Oxford Economics, Bahrain’s positive outlook is underpinned by a 5.5% rise in the oil economy, outpacing an expected 4.1% growth in non-oil activities.

However, the country’s structural changes and fiscal consolidation efforts will slow the overall GDP growth to 2.1% in 2023-24, well below the 2010-19 average of 3.4% annually, the report said.

As Bahrain’s economy recovers from the effects of the Covid-19 pandemic, its GDP grew by 5.5% year-on-year (y/y) in Q1, representing the fastest quarterly growth since Q2 2014. The Kingdom’s non-oil sector grew by 7.8% in Q1, driven by the manufacturing sector, but is expected to slow in the coming quarters and into 2023 as high inflation bites into consumer incomes.

Bahrain’s oil sector growth will be driven by higher oil production, despite a decline in Q1. Since 2015, the annual real growth of Bahrain’s oil sector has only expanded once relative to the previous year, in