Most investors optimistic about Bahrain’s economy says survey

An overwhelming majority of investors (94.01 per cent) investors expressed stability in Bahrain’s investment climate during the first quarter (Q1) of this year, according to a government survey.

Releasing findings of the Business Confidence Environment Survey yesterday, the Information and eGovernment Authority said the Business Confidence Index (BCI) stood at 103.84 points in Q1 of 2023 compared with 101.99 points in Q4 of 2022, an increase of 1.85 points or 1.81pc.

The latest index value has shown a rise of 8.38 points compared with the same period of 2021. The quarterly survey measures business confidence by company size, industry, and investment type.

The overall business confidence for Q1 of 2023 increased to 28.35 points from 24.29 in the previous quarter.

In terms of industry type, the highest business confidence of 42.38 points was observed in the category of administrative and support service activities, followed by accommodation and food service activities at 36.47 points.

From the perspective of size, medium establishments that have 51-100 employees reported the highest business confidence of 39.75 points, with small businesses having 5-50 employees in second place at 30.42 points.

As for turnover, medium-sized companies (BD1m to BD3m) have the highest business confidence of 33.25, closely followed by large firms (+BD3m) at 32.84 points.

In terms of type of investments, establishments with both inward and outward foreign investments have topped with 38.8 points in the business confidence index. Nearly nine out of 10 (87.81pc) of establishments experienced stable/normal to favourable business performance during Q4 of 2022.

Even as 94.01pc of establishments had stable to favourable business performance expectations for Q1 of 2023, including 44.66pc expecting favourable performance and 49.35pc expecting stable or normal business performance, the outlook is 1.66pc lower compared to the previous quarter.

The number of pessimists or establishments which perceive unfavourable business performance was observed at 5.99pc.

Survey results revealed an increase of 2.45 points for establishments which expect favourable or optimistic operations for Q1 of 2023 compared to the previous quarter and a 4.11-point decrease among normal or stable operations. Compared to the previous period in 2022, an increase of 4.46 points for optimists and a decrease of 6.11 points for pessimists was seen for Q1 of 2023.

A key metric is the expectation balance which measures the difference or balance between the percentages of favourable and unfavourable responses about the next quarter.

The expectation balance was 38.66 points for Q1 of 2023, increasing by 5.3 points, compared to Q4 of 2022.

It was also 10.55 points higher than that of the same period in Q1 of 2022.

Another significant barometer is the situation balance (current situation) – the difference or balance between the percentages of favourable and unfavourable responses observed during the last quarter. The situation balance for Q4 of 2022 was positive 18.48 points, higher by 7.01 points than the previous quarter’s situation balance of 11.47 points. It is 25.29 points higher than in the same period in 2022.

Business confidence indices are calculated using the results of quarterly surveys carried out by iGA on a sample of the business community.

These range from micro to large enterprises, including those classified as foreign and local investments (as indicated by the information in their commercial registrations).

The aim of the survey is to provide an indicator of the confidence levels of active establishments registered at the Industry and Commerce Ministry as well as those licensed by the Central Bank of Bahrain. The availability of this information helps foster an investor-friendly and competitive business environment, allowing decision-makers to take appropriate actions based on confidence levels relative to company size, industry, and investment type.




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