BMIs Q112 Bahrain Retail Report forecasts that the countrys retail sales will rise from an expected BHD0.46bn (US$1.22bn) in 2011 to BHD0.57bn (US$1.52bn) by 2015, boosted by a growing interest in Western styles of retailing and a steady rise in disposable incomes. However, this assumes that the ongoing political crisis that has weighed on the countrys short-term economic outlook is resolved over the medium to long term.

Bahrains nominal GDP in 2011 is forecast to be US$22.01bn, rising to US$27.96bn in 2015. Real GDP growth is expected to be 1.4% in 2012 as political and economic difficulties persist. Average annual GDP growth of 2.8% is predicted by BMI between 2011 and 2015.

Statistics from the Ministry of Culture and Informations tourism affairs division show that tourist arrivals rose by an average of 10-15% a year over the past three years. In 2007, Bahrain attracted 5.5mn tourists, 4.9mn of them from other Gulf Cooperation Council (GCC) member countries. Before the political unrest, tourism arrivals were forecast to rise by an average of 2.5% per annum over the next decade.

The annual Formula One (F1) grand prix in Sakhir has generated hundreds of millions of dollars in revenue since it became a fixture on the racing calendar in 2004, and its cancellation in 2011 undoubtedly had a knock-on effect on retail sales. However, its reinstatement on the 2012 F1 calendar is good news for the retail sector.

In 2005, 71.2% of the Bahraini population was described by the UN as economically active, with 40.7% in the 20-44 age range crucial for retail sales. In 2010, 72.7% of the population was estimated to be economically active but the proportion of those in the 20-44 age band fell by 39.9%.

The very high level of urbanisation in Bahrain is an important factor. In 2005, more than 90% of the population was classified by the UN as urban and this rose to an estimated 91% in 2010. About 89% of the population live in the cities of Manama and Muharraq.

Retail sub-sectors that are predicted to show strong growth over the forecast period include automotives, with sales forecast to rise by nearly 17% from an expected 49,157 units in 2011 to 57,300 units by 2015. However, 2011 has been difficult, with H111 sales down by 50-70% on the same period last year, according to Gulf News.

With the Bahraini consumer electronics market well positioned to function as an electronics trading hub, particularly between India and the Far East, sales are predicted to increase from an expected US$0.63bn in 2011 to US$0.79bn by the end of the forecast period, a rise of more than 26%.

Over-the-counter (OTC) pharmaceutical sales are expected to rise by nearly 45% over the forecast period, increasing from US$26.3mn in 2011 to US$38.1mn by 2015.

Retail sales for our set of Middle East and Africa (MEA) countries in 2011 are predicted to amount to

US$260.98bn, based on the varying national definitions. Total consumer spending for the region, based on BMIs macroeconomic database, is forecast at US$722.41bn. In 2011, BMI predicts that South Africa and Saudi Arabia will together account for an estimated 57.1% of regional retail sales, with Israel accounting for a further 15.5%. By 2015, the combined share of South Africa and Saudi Arabia is expected to reach 58.5%. For Bahrain, the estimated 2011 market share of 0.5% is expected to decrease to 0.4% by 2015.