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Home > Country Profiles > Bahrain

Country Profiles

Financial Outlook

The economy rebounded over 2013, with growth estimated at 5% by the Economic Development Board (EDB) of Bahrain in December, up from 3.4% in 2012. The economy was badly affected by the political unrest that erupted in 2011. The EDB said that the expansion was driven by substantial gains in the oil and gas sector, where output levels neared capacity. Bahrain has the most diversified economy of all the Gulf states, but like them continues to rely heavily on the hydrocarbon sector, with oil accounting for a quarter of the economy. According to the EDB growth will slow to 4% next year, but the contribution of the nonoil sector will increase significantly due to a large increase in project spending. The labor market gradually improved in 2013, with total private sector employment growth in the second quarter of 6.2%, largely due to a recovery in a number of labor-intensive sectors such as hotels and restaurants as well as construction. Less positively, in January 2014 the IMF warned that Bahrain’s budget deficit would increase to 5% of GDP in 2014, almost double the 2012 gap.

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Further reading on Bahrain

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