Skip to content Skip to Search
Skip navigation

Bahrain’s consumer spend to rise as destination malls open

The $530 million Bahrain Marina development, with 200 retail units and restaraunts, is a sign of predicted increased consumer spending in the kingdom Bahrain Marina Development Company
The $530 million Bahrain Marina development, with 200 retail units and restaraunts, is a sign of predicted increased consumer spending in the kingdom
  • Household spending to grow 3.7%
  • $530m, 200-shop project on site
  • Cost of credit decreasing

Consumer spending in Bahrain is forecast to rise this year as its economy grows – with retail confidence reflected by construction starting on a $530 million development.

Bahrain Marina will have nearly 200 shops, including international brands, restaurants and cafes, as well as 274 residential units, 182 berths for yachts and boats, and more than 300 hotel keys.

Khaled Mohammed Yusuf Najibi, chairman of Bahrain Marina Development Company, said it would be a “significant destination” in the region. 

The company added last week that demand for apartments had “exceeded all expectations” and the first phase of more than 50 units had sold out.

Total real estate transactions in Bahrain were up by 5.1 percent in the first nine months of 2023 compared with the same period in 2022, according to CBRE.

Analysts expect a fall in borrowing costs this year, which will support credit-based spending on consumer goods. It will also lower the burden of large debt repayments on households, allowing for greater discretionary spending.

BMI said in a research note that in nominal local currency terms, household spending this year is set to grow by 3.7 percent and reach BHD3.2 billion ($8.4 billion).

Central Bank of Bahrain data shows the value of point-of-sales and e-commerce transactions exceeded BHD335 million in September, on a par with the month before. 

The volume of transactions reached 15.5 million in September. 

“The volatility in both the value and volume of transactions has subsided noticeably over the second half of 2023, indicating that there should be stability going forward,” said BMI. 

E-commerce transactions typically account for about a third of the total value.

New construction

Retail operators in Bahrain are developing destination malls as well as neighbourhood shopping plazas, CBRE said. 

Marassi Mall is due to open in February, with about 116,000 sq m of retail space. The Avenues Phase 2, which will add about 40,000 sq m, is also set for completion this year. 

“While there are concerns over the significant pipeline supply and the impact on rental rates, take-up of space in key new projects and growth in consumer spending provide a more optimistic view,” CBRE added.

BMI’s outlook on consumer spending in Bahrain in 2024 is in line with its forecast for real GDP growth of 2.7 percent. 

“The stronger economic expansion will mainly be the result of stronger exports and higher investment,” analysts said. “Greater non-oil activity and a smaller decline in the oil sector, along with an economic rebound in Bahrain’s main trading partners, such as Saudi Arabia and the UAE, will support goods export growth.”

Increased efforts to attract tourists and the resumption of direct flights with Qatar will also drive up growth in services exports, BMI added. 

Bahrain’s consumer price inflation came in at -0.1 percent year on year in September, having fallen from highs of 4 percent in late 2022. 

“We do not expect that the low level of inflation in 2024 will place downward pressure on consumer spending, particularly given that income growth is expected to remain well ahead of inflation,” said BMI.

The unemployment rate, which also affects consumer spending, is set to remain stable at 1.4 percent next year, analysts added.

However, rising household debt could pose a risk to the consumer outlook. 

BMI said secured debts – such as mortgages and vehicle finance – had grown from BHD3.7 billion in September 2019 to BHD5 billion in September 2023. Credit card debt has increased from BHD100 million to BHD114.3 million over the same period. 

“This could place consumer spending under pressure over the first half of 2024. The projected fall in the interest rate over the second half should reduce this pressure.”

Latest articles

Shoppers choose vegetables in Istanbul; inflation means people are spending on essentials

Turkish retailers’ confidence wavers as inflation bites

Confidence is falling among Turkish retailers, according to a survey from the country’s statistics agency Turkstat. Shoppers have been scaling back on big-ticket purchases, spending instead on basic consumer goods as inflation piles pressure on household incomes. May’s business confidence report, released by Turkstat on June 24, showed sentiment in the retail sector at its […]

Water is handed out to pilgrims in Mecca. Hundreds of pilgrims without a Hajj permit died during extreme heat last week

Egypt shuts down 16 travel companies after Hajj tragedy

Egypt has withdrawn the operating licences of 16 travel companies for organising unlicensed Hajj trips to Saudi Arabia. A statement from the Egyptian government said the companies would be prosecuted and fined, with the funds used to compensate pilgrims’ families for their loss.  Hundreds of Egyptians were among 1,301 people who died of exposure to […]

A floating production unit in Israel's Karish gas field in the eastern Mediterranean. Carlyle is creating a new oil and gas company to manage the field

New Carlyle entity to manage East Med gas projects

Carlyle, the Nasdaq-listed private equity company, is creating a new oil and gas company to manage recently-acquired assets in the Mediterranean hydrocarbons market. The new as yet un-named entity will be led by former BP CEO Tony Hayward and will manage a portfolio of gas-weighted exploration and production assets in Italy, Egypt and Croatia, according […]

Spinneys plans to open another 12 stores in Saudi Arabia by 2028

Spinneys opens first Saudi supermarket in Riyadh

Spinneys has opened its first supermarket in Saudi Arabia and is planning a further 12 stores in the country by 2028. The UAE supermarket operator listed on the Dubai Financial Market last month and raised AED1.38 billion ($375.7 million) from its initial public offering, which was oversubscribed almost 64 times. The first Spinneys in Saudi […]