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Significance
Bahrain’s economic prospects have improved dramatically following the surge in world commodity prices in recent months. Strong oil and aluminium revenues have boosted the fiscal and current accounts, although the former is still in deficit. Necessary budgetary reform has been limited for fear of provoking further social unrest.
Impacts
Buoyant oil revenue will allow Gulf neighbours, in particular Saudi Arabia, to increase their investments in Bahrain.
Bahrain will come under pressure from the IMF actively to reduce its unsustainable government debt levels.
Improving ties with Israel will mean Washington is less likely to criticise Bahrain’s poor human rights record.
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2022
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