LATEST ECONOMIC BRIEFINGS
THAILAND | 05.02.2010
Thailand is looking to overhaul the country's rail network, planning to combine state spending with private sector investments to revamp a system that in recent years has been overtaken by road transport as the economy's primary freight mover.
OMAN | 05.02.2010
Investors will be hoping the steady recovery posted by the Sultanate's equities last year will continue into 2010. Already, early signs of confidence are becoming apparent, with initial public offerings (IPOs) expected to resume shortly and a degree of bullishness prompted by resurgent oil prices.
SAUDI ARABIA | 05.02.2010
As the Gulf Cooperation Council's biggest economy closes the books on 2009, it may well be remembered as a year of caution and mixed fortunes. Economic growth was positive and inflation fell, but lower oil prices caused the state budget to drift into deficit territory. Nevertheless, with the government clearly committed to supporting the economy through stimulatory spending, higher growth is already expected in 2010.
ROMANIA | 04.02.2010
Having been one of the driving forces in the Romanian economy up until the end of 2008, the construction sector has had to take a back seat over the past 12 months, with workers being laid off, many new projects put on the backburner and ongoing developments halted as funding and demand dried up.
LEBANON | 01.02.2010
Lebanon continued to defy the expectations of many in 2009, being able to not only weather the worst of the global financial crisis but also post solid economic gains while undergoing another period of political tension.
COUNTRY COVERAGE
Health Report Card
Bahrain, Volume 117
24.08.2007
24.08.2007
As an exercise in deflating pessimism it couldn't have been better. The merchants of doom and gloom have been predicating their comments on declining oil reserves for years, with the implicit rider that the entire economy of the kingdom was destined to plummet down a slippery slope.
Now a report from the Central Bank of Bahrain (CBB) has left the pessimists spluttering and bereft of ammunition for the slightest tale of woe. Oil revenues are up. Inflation is minimal (something Dubai and Qatar would love to be able to claim). Exports are up. The trade surplus is up. The heart and homeland of banking in the Gulf and beyond is riding the crest of a wave and - perhaps best of all - the vast majority of the new jobs that have been created in the past 12 months are in the private sector.
The report, a first of its kind issued on August 16, showed that the kingdom's gross domestic product (GDP) increased by 7.1% in 2006, driven by strong local and foreign investment, a record high current accounts surplus and an expanding private sector.
Though the rate of GDP growth was slightly down on the 2005 figure of 7.8%, it still compares well with other Gulf countries, most of which are much better supplied with energy resources. With inflation coming in at just 2.1% for the year, and price rises tipped by the bank to stay at around 3% for 2007, Bahrain is at the lower end of the scale on that front, rating well against the 10% predicted for nearby Qatar.
For the 12 months ending December 31, Bahrain accumulated a current account surplus of $1.9bn for 2006, while the trade surplus increased from $2.5bn to $3.8bn year-on-year.
"The current account surplus for 2006 is the highest surplus in the history of the Bahrain economy, " the report said.
Overall, exports rose by 15.3% for the year, with oil accounting for 77.7% of the total revenue of $11.4bn, with non-oil exports increasing by a more modest 4.6%.
To some extent, the growth in export earnings was offset by a 12.6% increase in imports, with oil being the single biggest ticket item, accounting for $4.8bn of the $8.9bn spent overseas.
Another sector that the government has pinned a lot of hopes on to drive the economy is banking, which had a boom year according to the CBB report. Bahrain's banks recorded a 33.5% increase on their consolidated balance sheets in 2006, rising to $187.4bn.
There was also a strong flow of foreign direct investment into Bahrain in 2006, with $2.9bn of overseas capital entering the country's economy.
According to Rasheed Al Maraj, CBB governor, this figure reflects the openness of the kingdom's economy and the success of the policies put in place by the state to attract foreign direct investments.
According to the CBB's report, more than 15,300 new jobs were created in 2006, boosting employment levels by 4.6%, with the total number of people in the workforce rising to 351,862.
Most satisfying for a government that has been actively encouraging the expansion of the Bahraini private sector is that only 1300 of these positions were added to the state's payroll. The 38,800 public servants accounted for 11% of the country's workforce in 2006, slightly down on the percentage for the previous year, in line with the government's policy of reducing the role of the state in the economy.
By contrast, almost 14,000 of the jobs created were in the private sector, with the workforce growing from 299,080 in 2005 to 313,039 in 2006, representing 89% of those employed in the kingdom.
Looking to the future, there are a few concerns for the government, most notably the fact that much of the success of last year was built on strong energy prices. Though there is no immediate prospect of these falling dramatically, fluctuations could eat into Bahrain's revenue in the coming years.
Now a report from the Central Bank of Bahrain (CBB) has left the pessimists spluttering and bereft of ammunition for the slightest tale of woe. Oil revenues are up. Inflation is minimal (something Dubai and Qatar would love to be able to claim). Exports are up. The trade surplus is up. The heart and homeland of banking in the Gulf and beyond is riding the crest of a wave and - perhaps best of all - the vast majority of the new jobs that have been created in the past 12 months are in the private sector.
The report, a first of its kind issued on August 16, showed that the kingdom's gross domestic product (GDP) increased by 7.1% in 2006, driven by strong local and foreign investment, a record high current accounts surplus and an expanding private sector.
Though the rate of GDP growth was slightly down on the 2005 figure of 7.8%, it still compares well with other Gulf countries, most of which are much better supplied with energy resources. With inflation coming in at just 2.1% for the year, and price rises tipped by the bank to stay at around 3% for 2007, Bahrain is at the lower end of the scale on that front, rating well against the 10% predicted for nearby Qatar.
For the 12 months ending December 31, Bahrain accumulated a current account surplus of $1.9bn for 2006, while the trade surplus increased from $2.5bn to $3.8bn year-on-year.
"The current account surplus for 2006 is the highest surplus in the history of the Bahrain economy, " the report said.
Overall, exports rose by 15.3% for the year, with oil accounting for 77.7% of the total revenue of $11.4bn, with non-oil exports increasing by a more modest 4.6%.
To some extent, the growth in export earnings was offset by a 12.6% increase in imports, with oil being the single biggest ticket item, accounting for $4.8bn of the $8.9bn spent overseas.
Another sector that the government has pinned a lot of hopes on to drive the economy is banking, which had a boom year according to the CBB report. Bahrain's banks recorded a 33.5% increase on their consolidated balance sheets in 2006, rising to $187.4bn.
There was also a strong flow of foreign direct investment into Bahrain in 2006, with $2.9bn of overseas capital entering the country's economy.
According to Rasheed Al Maraj, CBB governor, this figure reflects the openness of the kingdom's economy and the success of the policies put in place by the state to attract foreign direct investments.
According to the CBB's report, more than 15,300 new jobs were created in 2006, boosting employment levels by 4.6%, with the total number of people in the workforce rising to 351,862.
Most satisfying for a government that has been actively encouraging the expansion of the Bahraini private sector is that only 1300 of these positions were added to the state's payroll. The 38,800 public servants accounted for 11% of the country's workforce in 2006, slightly down on the percentage for the previous year, in line with the government's policy of reducing the role of the state in the economy.
By contrast, almost 14,000 of the jobs created were in the private sector, with the workforce growing from 299,080 in 2005 to 313,039 in 2006, representing 89% of those employed in the kingdom.
Looking to the future, there are a few concerns for the government, most notably the fact that much of the success of last year was built on strong energy prices. Though there is no immediate prospect of these falling dramatically, fluctuations could eat into Bahrain's revenue in the coming years.
