Export trends for businesses in Bahrain in 2023

Introduction

Bahrain, an island nation situated in the Persian Gulf, has been witnessing notable developments in its export sector over the years. With a strategic geographic location and a relatively open economy, Bahrain has become an attractive hub for businesses aiming to expand their international presence. In this article, we will explore the export trends for businesses in Bahrain in 2023 and the factors contributing to the country's growth in international trade.

Overview of Bahrain's Economy

Before delving into the export trends, let's briefly understand the foundation of Bahrain's economy. Historically, the nation heavily relied on oil and gas exports, but in recent years, there has been a significant push for economic diversification. Bahrain has been actively fostering sectors like financial services, manufacturing, tourism, and information technology to reduce its dependency on oil revenues and enhance economic resilience.

Importance of Exports for Bahrain

Exports play a pivotal role in bolstering Bahrain's economic growth. They not only generate foreign revenue but also foster innovation, create job opportunities, and attract foreign investments. By expanding their international reach, Bahraini businesses can tap into new markets, increasing their profitability and competitiveness.

Exports of Oil and Gas Products

Despite efforts to diversify, oil and gas products remain significant contributors to Bahrain's export revenue. The country continues to be a net exporter of crude oil and refined petroleum products. However, the government is actively encouraging the growth of non-oil exports to reduce the impact of fluctuations in global oil prices.

Growth in Non-Oil Exports

Bahrain has witnessed promising growth in non-oil exports, indicating a positive shift in the country's economic landscape. Non-oil exports include products such as aluminum, chemicals, machinery, electrical equipment, and textiles. The rise in non-oil exports reflects the success of Bahrain's economic diversification strategy.

Key Export Destinations

Bahrain's geographical proximity to major markets in the Middle East, Asia, and Europe gives it a competitive advantage. Saudi Arabia, the United Arab Emirates, the United States, and Oman are some of the key destinations for Bahraini exports. Establishing strong trade relationships with these countries has been crucial to sustaining export growth.

Emerging Export Sectors

The government of Bahrain has been actively promoting emerging export sectors such as renewable energy, healthcare, education, and technology services. These sectors present new opportunities for businesses to expand their export portfolio and explore untapped markets.

Challenges Faced by Bahraini Exporters

While Bahrain's export sector is on an upward trajectory, it does face several challenges that need to be addressed for sustained growth.

Global Market Competitiveness

As international competition intensifies, Bahraini exporters must continuously innovate and improve the quality of their products and services to remain competitive on a global scale.

Economic and Political Factors

Economic fluctuations and political instability in key export markets can impact Bahrain's trade prospects. To mitigate these risks, exporters need to diversify their customer base and explore new markets.

Diversification and Innovation

The ongoing drive for economic diversification necessitates increased efforts in research, development, and innovation to foster new export sectors and products.

Government Initiatives to Boost Exports

Recognizing the significance of exports in driving economic growth, the Bahraini government has taken proactive measures to support the export sector.

Economic Vision 2030

The Economic Vision 2030 outlines a comprehensive roadmap for Bahrain's economic development, with a focus on enhancing the non-oil sectors, attracting foreign investments, and improving the overall business environment.

Trade Agreements and Partnerships

Bahrain has entered into various trade agreements and partnerships with countries worldwide to facilitate access to international markets, streamline trade processes, and reduce trade barriers.

Export trends for businesses in Bahrain - Major Trends and Statistics

Infographics by GO-Globe Bahrain

As of May 2023, 80% of the country's GDP is generated from non-oil sectors, which is a 50% increase from the past decade, where 40% of the economy's reliance was on oil and gas reserves.
Bahrain Total Exports recorded US$6.8 billion in Dec 2022, compared with US$7.4 billion in the previous quarter.
In the latest reports, Bahrain Total Exports grew 2.3% YoY in Dec 2022.
Total Imports recorded US$5 billion in Dec 2022, which registered an increase of 1% year on year.
Bahrain Trade Balance recorded a surplus of US$8.2 billion in Dec 2022.
In 2022, the country's GDP hit an all-time high, where GDP rose by 4.9% and non-oil real GDP increased by 6.2%.
Tourism revenues topped US$3.98 billion in 2022, an increase of 50% compared to the figure for the same year.
According to the 2022 statistics, the number of visitors arriving for tourism purposes reached 9.9 million, up by 19% over the target number of 8.3 million visitors.
As of December 2022, Bahrain has attracted US$921 million from 66 companies. The investments are expected to generate over 4,700 jobs over the next three years in key sectors, including financial services, IT and digital economy, logistics, manufacturing, and tourism.
As of May 2023, the regulatory reforms package has gathered up to US$2.5 billion foreign investment.
In the financial results for 2022, the hotel and restaurant industry saw the largest growth by 13.6%, followed by government services at 6.7%, real estate and business activities at 5.5%, trade at 5.4% manufacturing at 4.9%, transportation and communications at 4.5%, financial corporations at 4.1% and construction at 1.4%.
By December 2022, the country’s total public revenues increased by 42% to US$9.26 billion.
More than US$2.5 billion of investment has been rolled out by the international players to support regulatory reforms, which would increase the ease of doing business by simplifying the process to get licenses.
By March 2023, Bahrain had attracted more than US$130 million of investments in the IT Sector, which aims to create more than 900 new jobs in the next year.
The cumulative revenue generation opportunities for the ICT market in Bahrain are estimated at US$27.15bn between 2022 to 2026.
ICT spending in Bahrain is expected to reach US$2.23bn by 2026.
By 2030, the logistics sector aims to contribute up to 10% of the total GDP of the country's economy.
By 2026, insurance sector contribution to the GDP aims to contribute to 8.4% of the GDP, and the financial sector aims to reach 20% of the total GDP.
By 2027, a 35% growth is expected in the national employment sector in the IT and technology industry.

Future Outlook for Bahraini Exports

The future looks promising for Bahrain's export sector. With continued emphasis on diversification, innovation, and international partnerships, Bahraini businesses are well-positioned to capitalize on emerging opportunities in the global market.

Conclusion

In conclusion, Bahrain's export trends in 2023 reflect a nation committed to reducing its reliance on oil exports and diversifying its economy. The growth of non-oil exports, coupled with government initiatives and strategic partnerships, indicates a positive trajectory for Bahrain's businesses on the international stage.