Overview of the Local Economy Q1 2021 Report Content Executive Summary Page 3 1 Employees in Various Economic Sectors Page 5 2 Trade Exchange Page 13 3 Local Economic Statistics Page 18 4 The Impact of the Pandemic on Various Sectors Page 28 Executive Summary Employees in Various Economic Sectors • Number of private sector employees in 2020 decreased by 6% compared to 2015, and by 9% compared to 2019 due to pandemic. • A decrease in the number of employees of most economic sectors since 2015, and the largest decrease was in the agriculture, fishing, forestry, and related activities sector by -34%. • The largest increase was in the number of employees in the health and social work sector by 138%. Trade Exchange • The total volume of trade (oil and non-oil) in Bahrain decreased by -12% from 33.5 billion US dollars in 2010 to 29.6 billion US dollars in 2020. • A 2.7% decrease in the volume of non-oil trade during 2020 compared to 2019. • A decrease in the volume of trade with the Gulf States during 2020 compared to 2019. The most prominent decrease was with the United Arab Emirates by 21.6%, and with Kuwait by 17%. 3 Studies and Initiatives Centre Local Economic Statistics • The economy is expected to recover in 2021, as the real GDP growth is expected to reach approximately 3.3%. • The consumer price index fell by 2.3% in 2020 compared to 2019. • Bahrain ranks 39th internationally in the Productive Capacities Index. • Bahrain ranks 49th internationally in the Food Security Index. • • • • • • The Impact of the Pandemic on Various Sectors • A 424% increase in Fawri + remittances during February 2021. • An increase in the number of electronic payment transactions by 15.5% and the value of transactions by 2.6% during February 2021. • 5% decrease in the number of ATM withdrawals in 2020 compared to 2019. • 118% increase in the value of point of sales and ecommerce transactions in the supermarket sector. • 45% decrease in the value of point of sales and ecommerce transactions in the jewelry sector. • The number of inbound visitors for tourism in Bahrain decreased by 83%, from 11.1 million visitors in 2019 to 1.9 million visitors in 2020. • Total inbound tourism revenues decreased by 80% in 2020 from BD 1.5 million to BD 0.3 million. • 494% increase in the cybercrimes during the past year. • The coronavirus pandemic reduced classroom training courses by 80%. Studies and Initiatives Centre 4 Studies and Initiatives Centre 1 Employees in Various Economic Sectors 5 Studies and Initiatives Centre Number of private sector employees in 2020 decreased by 6% compared to 2015, and by 9% compared to 2019 due to pandemic The negative repercussions of the coronavirus pandemic have impacted all aspects of life. The global economy has been affected by the lockdown imposed by several countries, and the negative impact has lingered despite the gradual easing of restrictions. Many sectors have been subjected to a near-total closure to date, which caused an increase in unemployment rates. The commercial sectors in the Kingdom of Bahrain were not protected from the adverse effects of COVID-19, and many employers laid off employees. The total number of employees in various sectors decreased by 9% from 563,447 in 2019 to 515,155 in 2020. This is larger than the decrease in employees over the past 5 which amounts to 6%. This highlights the significant impact of the coronavirus pandemic on employment rates. The agriculture, fishing, forestry, and related activities sector was the most impacted sector over the past 5 years, with a 34% decrease in employees. Change in the number of employees over 5 years -34% -29% -11% -7% decrease in the number of decrease in the decrease in decrease in employees in agriculture, number of employees the number of the number of fishing, forestry, and related in the manufacturing employees in the employees in the activities activity construction activity retail activity -30% -15% +50% +4% decrease in the number increase in the number increase in the number decrease in of employees in the of employees in the of employees in the the number of hotels and restaurants transport, storage and financial services employees in the real activity communication activity activity estate activity +68% 138% increase in the number increase in the number of of employees in the employees in the health education activity and social work activity Source: Social Insurance Organization 6 Studies and Initiatives Centre 7 -34% -29% Employees inthemanufacturingactivity Employees in the agriculture, fishing and forestry activity fishingandforestry Employees intheagriculture, economic sectors Change innumberofemployeesvarious 2015 14,955 2015 282 Bahrainis 63,495 Bahrainis 2,224 employees in2020. -29% during the past five years from 78,450 employees in 2015 to 56,070 by The totalnumberofemployeesinthemanufacturingactivitydecreased 2,506 employeesin2015to1,6552020. and related activities decreased by -34% during forestry, fishing, agriculture, agriculture, the the in employees of number past total The five years, from 78,450 2,506 13,644 279 2016 2016 57,584 2,463 Non Bahrainis 71,228 Non Bahrainis 2,742 2017 13,715 2017 241 54,854 1,645 68,569 1,886 Total Total 13,524 238 2018 2018 52,365 1,632 65,889 1,870 13,556 232 2019 2019 Source: SocialInsuranceOrganization Source: 46,621 1,535 60,177 1,767 13,282 225 2020 2020 42,788 1,430 56,070 1,655 Studies and Initiatives Centre 8 -11% -7% Employees in the wholesale / retail trade, vehicle repair andpersonalgoodsactivity trade,vehiclerepair Employees inthewholesale/retail Employees intheconstructionactivity 10,887 2015 19,635 2015 128,699 110,118 Bahrainis Bahrainis approximately approximately 121,000 employees in 2020. the past five years, fromby -7%during activity decreased in the retail The totalnumberofemployees approximately 130,000 employees in 2015 to 2015 to124,000employeesin2020. -11% during the past five years, from approximately 140,000 employees in by The totalnumberofemployeesintheconstructionactivitydecreased 139,586 129,753 11,021 2016 19,138 2016 151,558 116,077 162,579 Non Bahrainis Non Bahrainis 135,215 11,324 2017 19,681 2017 150,579 112,413 161,903 132,094 Total Total 10,963 2018 19,996 2018 138,496 112,433 149,459 132,429 11,170 2019 20,319 2019 Source: SocialInsuranceOrganization Source: 125,445 110,425 136,615 130,744 10,970 2020 19,517 2020 112,633 101,176 123,603 120,693 Studies and Initiatives Centre 9 +50% -30% Employees inthetransportation,storageandcommunicationactivity activity Employees inthehotelsandrestaurants 8,043 2015 3,675 2015 Bahrainis Bahrainis 12,652 35,264 in 2015to31,000employees2020. activity increased by 50% during the past five years, from 21,000 employees The totalnumberofemployeesinthetransportation,storageandcommunication employees in2020. 27,000 to 2015 in employees 39,000 from years, five past the during -30% by activitydecreased The totalnumberofemployeesinthehotelsandrestaurants 20,695 38,939 7,878 2016 3,457 2016 15,387 37,345 Non Bahrainis Non Bahrainis 23,265 40,802 2017 3,393 7,562 2017 17,421 34,079 24,983 37,472 Total Total 7,565 3,172 2018 2018 22,116 32,788 29,681 35,960 8,043 3,098 2019 2019 Source: SocialInsuranceOrganization Source: 25,972 31,022 34,015 34,120 7,941 2,916 2020 2020 23,179 24,333 31,120 27,249 Studies and Initiatives Centre 10 -15% +4% Employees in the real estate, leasing and commercial projects activity projects estate,leasingandcommercial Employees inthereal Employees inthefinancialservicesactivity 8,790 8,899 2015 2015 35,457 5,570 Bahrainis Bahrainis 44,247 employees in2020. -15% during the past five years, from 44,000 employees in 2015 to 37,000 by estateactivitydecreased The totalnumberofemployeesinthereal employees in2020. by 4% during the past five years from 14,000 employees in 2015 to 15,000 The total number of employees in the financial services activity increased 14,469 8,929 8,435 2016 2016 6,260 39,144 Non Bahrainis Non Bahrainis 47,579 15,189 8,800 2017 8,732 2017 35,908 6,096 14,896 44,640 Total Total 8,436 8,907 2018 2018 6,240 35,202 15,147 43,638 9,184 8,720 2019 2019 Source: SocialInsuranceOrganization Source: 6,490 33,334 15,674 42,054 9,119 2020 8,181 2020 29,523 5,986 37,704 15,105 Studies and Initiatives Centre 11 +138% +68% Employees inhealthandsocialworkactivity Employees ineducationactivity 1,259 3,543 2015 2015 Bahrainis Bahrainis 2,875 3,929 employees in 2020. in employees by 138% during the past five years, 4,134 from employees in 2015 to 9,835 and socialworkactivityincreased of employeesinthe health The totalnumber employees 2020. in 12,000 to 2015 in employees 7,472 from years, five past the during The total number of employees in the education activity increased by 68% 4,134 7,472 2016 1,354 3,617 2016 10,807 7,937 Non Bahrainis Non Bahrainis 12,161 11,554 1,576 2017 3,599 2017 10,597 6,933 12,173 10,532 Total Total 1,849 3,811 2018 2018 10,306 8,642 12,155 12,453 Source: SocialInsuranceOrganization Source: 4,044 1,964 2019 2019 8,293 9,515 13,559 10,257 3,833 1,973 2020 2020 7,862 8,725 9,835 12,558 Studies and Initiatives Centre The dual impact of COVID-19 and the digital economy on the labor market The COVID-19 pandemic-induced lockdowns and related global recession of 2020 have created a highly uncertain outlook for the labor market and accelerated the arrival of the future of work. As such, we can see large changes in the number of workers in many of the economic sectors over the past 5 years.