Market Report, "Bahrain Business Forecast Report Q4 2014", published

Core Views

* We forecast the Bahraini economy to grow by 3.4% in real terms in 2014, down from 5.3% in 2013, owing to the normalisation of oil production. Headline growth will remain relatively robust in the years ahead - reaching 3.8% in both 2015 and 2016 - and will be largely driven by the non-hydrocarbon sector. However, a return to pre-crisis rates of real GDP growth above 7% remains off the cards in the near term.
* In light of record oil revenues and the weakness of private investment, we expect public spending to outperform over the coming quarters, which should support activity in the non-hydrocarbon economy. Efforts to address the shortage of affordable housing will see government CAPEX accelerate.
* Bahrain's reputation as a stable and welcoming location to do business in the Gulf has suffered as a result of the volatile political climate. At the moment, it remains to be seen if Manama will be able to compete with Doha and Dubai in attracting investment into the all-important hospitality and financial services industry.
* The economy's medium-term outlook remains contingent upon a lasting solution being found to the current political crisis. Unfortunately, we maintain our relatively guarded outlook on the prospects that the government and opposition can come to some form of agreement in the near term.
* Bahrain's weak medium-term fiscal prospects will force the government to make difficult choices. We believe that Manama will have little option but to introduce new taxes over the coming years, while the issue of spending consolidation will loom large on the agenda. Support from Saudi Arabia could delay these pressures, but would entail a significant loss of sovereignty.

Full Report Details at
- http://www.fastmr.com/prod/871620_bahrain_business_forecast_report_q4_2014.aspx?afid=301

Key Risks To Outlook

* A more pronounced regional crisis stemming from an uptick in tensions between Iran and the West could see risk premiums spike higher, particularly for Bahrain.
* A marked drop in oil prices concomitant with a slowdown in growth in Europe, the US and China...

The Bahrain Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Bahrain and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Bahrain's economic, political and financial prospects through end-2017, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

* Forecast the pace and stability of Bahrain's economic and industry growth through end-2017.
* Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
* Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.

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