The Bahraini authorities continue to delay the 2015/16 budget, which highlights the difficult decisions to be made in the new environment where oil prices are still nearly 47% below their peak last June despite some recent recovery. Bahrain is dependent on oil for nearly 90% of its government revenues and, with a break-even oil price of US$128pb in 2014, it needs to cut spending sharply in order to avoid a large and potentially permanent deterioration in its public finances. Against a backdrop of continued political and social instability, we expect spending to be cut by 8%. But even so, the fiscal deficit is seen widening to almost 11% of GDP this year and public debt rising to 60% of GDP, nearly triple the level in 2009. As a result, our baseline forecast still assumes a marked decline in non-oil GDP growth, from 4.9% in 2014 to 3.4% this year. With oil output expected to fall by 1% this year, overall GDP growth is forecast to slow to just 2.7% this year, its slowest since 2011. At the same time, lower oil prices will result in a near-30% drop in exports this year, swinging the current account from a surplus of just over 6% of GDP in 2014 to a deficit of 2% of GDP this year.
- Bahrain: The following represents a general Table of Contents outline for the Country Economic Forecast.
- The actual report may cover any or all of the topics listed below. - Highlights and Key Issues - four/five paragraphs of analysis covering the main economic and political issues contained in the subsequent Economic Overview - Forecast Table showing % changes for the country - with 2 years of historical data and 4 years of forecast data for the following: - Domestic demand - Private consumption - Fixed investment - Stockbuilding (% of GDP) - Government consumption - Exports of goods and services - Imports of goods and services - Unemployment - Consumer prices - Current account balance (US$ and % of GDP) - Government budget (% of GDP) - Short-term interest rates (%) - Long-term interest rates (%) - Exchange rate (vs. US dollar) - Exchange rate (vs. euro) - Economic Overview - two pages of events-driven analysis highlighting the most recent economic activity and, where relevant, political developments of the country, detailing significant changes to Oxford Economics' forecasts - Charts and Tables - covering a full range of economic developments relevant to the time period covered.
- These could include such topics as: - Contributions to GDP growth - Monthly industrial output - Business and consumer confidence - Unemployment rate - Retail sales - Prices and earnings - Consumption and investment - Government balance and debt - GDP and industrial production - Monetary policy and bond yields - Background Information on the country - One or two pages of text covering the main historical political and economic factors that determine the country's current position - Key Facts on the country - Map of the country - Key political facts - Long-term economic and social development - changes since 1980 - Structure of GDP by output - latest year - Long-term sovereign credit ratings and outlook - Corruption perceptions index- latest year - Structural economic indicators - changes since 1990 - Destination of goods' exports -prior years - latest year - Composition of goods & services exports - latest year