MANAMA, 20 October – Bahrain’s economy is projected to grow at 4.3 per cent this year, according to HSBC, setting the highest pace for the country since 2014.
Presenting an optimistic outlook during a roadshow touring the region, a team of economists from the bank has forecast gross domestic product (GDP) growth of 6.5pc for the GCC in 2022, among the strongest in the world.
GDP is a measure of the value of the goods and services produced by an economy in a specific period.
Amid expectations that the Gulf nations are on course to deliver their strongest growth in at least a decade, the HSBC team sees economic expansion of 5pc during 2023 for the GCC as a whole with Bahrain’s national output set to rise by 2.8pc next year.
Comprising Simon Williams, chief economist for Central and Eastern Europe, Middle East and Africa; James Pomeroy, senior global economist, and Dominic Bunning, head of foreign exchange research in Europe, the team discussed the global and regional trends shaping the Middle East’s economies and their future prospects during their visit to the kingdom.
“We are seeing growth heading into next year with solid momentum and few signs of imbalances that threaten near-term performance. We are comfortable with the growth outlook which we see driven by ongoing gains in domestic demand,” Mr Williams said.
According to Mr Pomeroy, inflation may slow more quickly within the goods sector than elsewhere.
“Supply chains continue to ease up rapidly – the cost of sending freight from Asia to the US has now fallen by 85pc since this time last year – and if demand for goods dwindles, discounting may come into play,” he explained.
On the appreciation in the value of the USD over the last few months, Mr Bunning expects the rally to continue in the short term.
He said it was the bank’s view that the key components that have supported USD strength such as the soft global growth dynamics, fragile risk appetite and relatively higher US yields, should continue in the months ahead.
Thanking the panel of experts, HSBC in Bahrain chief executive Chris Russell said: “Our expert economic analysis team always provide actionable insights and perspectives especially in a time when conditions in the global economy are raising many questions about the outlook for growth, inflation and investment.”
The roadshow also visited Abu Dhabi, Dubai, Kuwait City, Muscat, Doha, and Riyadh. — Gulf Daily News
