Mubasher: NBK Capital projected the growth of Bahrain’s gross domestic product (GDP) to slow to 2% in 2015 from 4.5% in 2014.
“The growth of oil sector is poised to fall on lower oil prices. Non-oil GDP is expected to slow, but only modestly, during the same period, thanks to strong fiscal spending and GCC funds targeted at housing and infrastructure developments,” added a report issued by NBK Capital.
Bahrain is expected to see “a healthy boost” in investment, while the GCC countries have vowed to deliver funds amounting to about $10 billion spread over 10 years, to help improve Bahrain’s economy.
“According to the country’s Economic Development Board (EDB), Bahrain is expected to invest over $20 billion in industrial and infrastructure projects over the coming years,” noted NBK Capital.
Overall inflation stood at 1.6% y/y by the end of August 2015.
“Bahrain is forecast to pencil in one of the largest budget deficits in the GCC region. With the breakeven oil price estimated at around $120 per barrel, oil prices remaining low and government spending hovering at high levels,” added the report.
NBK Capital expected Bahrain’s budget deficit to widen to around 15% of GDP in 2015 from around 5% in 2014.
