Saudi Arabia Remains Bahrain’s Top GCC Trading Partner
Saudi Arabia continued to be Bahrain's leading trading partner within the Gulf Cooperation Council (GCC), despite a slight dip in trade volume during Q3 2024. According to a report by the Bahrain Chamber, trade with Saudi Arabia decreased marginally to $867 million, down from $873 million in the same period last year.
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While trade with the UAE, Bahrain's second-largest GCC trading partner, saw a significant 22% decline, dropping from $819 million to $640 million, trade with Qatar experienced a notable surge. Trade with Qatar skyrocketed by 409%, reaching $93 million from just $18 million in Q3 2023. On the flip side, trade with Kuwait fell by 19% to $92 million, and trade with Oman dropped sharply by 48% to $68 million.
Saudi Arabia also emerged as Bahrain's top export market during the third quarter of 2024, with Bahraini exports to Saudi totaling $647 million. Among the key exports, agglomerated iron ores and concentrates led the pack, valued at $125 million, which accounted for 19% of total exports to Saudi Arabia.
The UAE followed closely as Bahrain's second-largest export destination, with exports totaling $396 million. Agglomerated iron ores and concentrates remained the top export, with a value of $72 million, making up 18% of total exports to the UAE. The United States ranked third in terms of export value, receiving $291 million in Bahraini goods, with unwrought aluminium (not alloyed) being the top commodity at $68 million (23%).
Top Imported Commodities and Economic Trends
In terms of imports, Bahrain’s largest commodity was other aluminium oxide, valued at $452 million. Non-agglomerated iron ores and concentrates followed closely at $440 million, with aircraft engine parts coming in third at $104 million. Bahraini exports were largely dominated by unwrought aluminium alloys, which reached $650 million in Q3 2024. Other significant exports included agglomerated iron ores ($391 million) and unwrought aluminium (not alloyed) at $225 million.
Bahrain's consumer price index (CPI) increased by 0.4% in September 2024 compared to the same month in 2023, with restaurants and hotels seeing the largest price increase at 10.3%. Transportation and communication also saw price hikes of 2.4% and 2.2%, respectively. In contrast, the recreation and culture sector saw a 6.8% price decline.
Declining Interest Rates and Growth in Digital Payments
Interest rates on business loans in Bahrain experienced a decline across various sectors in Q3 2024. In the construction and real estate sector, interest rates dropped to 8.61% from 9.22% the previous year. Similarly, the manufacturing sector saw a reduction to 6.47%, down from 8.26%, and the trade sector saw a drop to 8.39% from 9.13%.
Digital financial transactions saw significant growth, with Fawri+ transactions up 14% and point-of-sale (POS) transactions increasing by 15% year-on-year. The value of POS transactions reached BD1.162 billion, up from BD1.012 billion in Q3 2023. Notably, supermarket transactions increased by 19%, department store transactions rose by 29%, and jewellery store transactions grew by 8%.
While Fawri+ and Fawateer transactions saw increases, ATM withdrawals fell by 8%, totaling BD264.2 million, down from BD288.7 million in Q3 2023.
Improvements in Bahrain’s Global Competitiveness
Bahrain's global competitiveness saw substantial improvements in 2024. The kingdom climbed nine places to 21st in the IMD World Competitiveness Ranking, driven by strengths in prices, tax policy, labour market, attitudes, values, and business legislation.
Khalifa Bin Salman Port (KBSP) earned recognition as the world’s most efficient small port in the 2023 Container Port Performance Index, jumping 30 places to 43rd globally. Bahrain also made significant strides in the UN E-Government Survey, advancing 36 places to 18th globally. It achieved ‘Very High’ e-government development status, ranking 10th in the Telecommunications Infrastructure Index and 18th in the E-Participation Index.
Bahrain’s progress across these sectors positions it as a key player in the GCC, and its commitment to improving global competitiveness and digital transformation reflects positively on its future economic prospects.
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