BMI View: Bahrain's substantial fiscal deficit and external sector headwinds weaken the position of the commercial property sector for investment. Foreign demand is muted whilst domestic companies continue to roll back on spending and expansion as economic woes persist. Rents will keep steady across the board, however any adverse economic developments could influence rate decline.
Bahrain's tenuous economic condition continues to weigh on foreign investment and domestic consumption.
Real GDP growth will slow over the coming quarters as difficult fiscal consolidation methods stifle the private sector, and persistently low oil prices limit government revenues. However, we forecast Bahrain to emerge from 2017 with a revised growth rate of 2.6%, up 0.2% from our previous forecast, on the back of strong investment into infrastructure and a rebound in the financial services, manufacturing and healthcare industries. Headwinds will limit commercial real estate market activity in the near term; though improving economic conditions will see a greater number of opportunities arise further into 2018.