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Analysis by Region - MENA

Publisher Oxford Economics
Published Mar 27, 2026
Length 7 Pages
SKU # OFE21076942

Description

In response to the US/Israel war with Iran, we've cut our GDP growth forecast for Bahrain by 7ppts to a 4.6% decline in 2026. We expect the war to cause a sharp contraction in oil production and exports along with less severe declines in private investment, domestic demand, and tourism activity in H1 2026. Our current baseline assumes a two-month full closure of the Strait of Hormuz, followed by a partial reopening in May-June 2026 and a gradual recovery of oil exports through Q3. We forecast a recovery to our pre-war baseline in 2027, with GDP growth of 6.5%.

Table of Contents

7 Pages
Bahrain: Trade disruption will drive sharp GDP contraction
Forecast overview
Recent developments
Short
term outlook
Key drivers of our short
term forecast
Medium
term GDP growth is set to cool
Economic risk
Economic risk evaluation
Background
Economic development
Structure of the economy
Balance of payments
Policy and politics

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