Economic Data & Indicators

Comprehensive economic information to guide your financial decisions

Global Economic Dashboard

Global economic indicators dashboard

Current Economic Climate

The global economy continues to navigate a complex landscape of challenges, including persistent inflation, monetary tightening, and geopolitical tensions. Despite these headwinds, growth has proven more resilient than many feared, with most major economies avoiding recession thus far in 2023.

Key trends in the current economic environment include:

  • Inflation showing signs of moderation but remaining above central bank targets in most advanced economies
  • Labor markets demonstrating surprising resilience despite higher interest rates
  • Services sectors outperforming manufacturing in most regions
  • Widening divergence in growth trajectories between countries and regions

Our baseline scenario anticipates a period of below-trend growth rather than severe contraction, though risks remain tilted to the downside given the lagged effects of monetary tightening.

Key Economic Indicators

GDP growth chart

GDP Growth Trends

Region/Country 2022 Actual 2023 Forecast 2024 Forecast
Global 3.4% 2.8% 3.0%
United States 2.1% 1.6% 1.1%
Eurozone 3.5% 0.8% 1.4%
China 3.0% 5.2% 4.5%
Japan 1.0% 1.3% 1.0%
GCC 7.3% 3.4% 3.6%
Bahrain 4.9% 3.1% 3.3%

Analysis

Global growth is moderating but proving more resilient than anticipated earlier in the year. Advanced economies are experiencing the most significant slowdown, with the impact of higher interest rates gradually filtering through to economic activity. The United States has shown surprising resilience thus far, though leading indicators suggest further moderation ahead.

Emerging markets present a mixed picture, with China's reopening providing less momentum than initially expected. India remains a bright spot with robust growth prospects, while other emerging economies face challenges from tighter financial conditions and weaker external demand.

In the Middle East, GCC economies are transitioning from the exceptionally strong growth of 2022, which was driven by high oil prices and post-pandemic recovery. While growth rates are moderating, they remain healthy by global standards, supported by continued economic diversification efforts and infrastructure development.

Bahrain's economy continues to expand at a solid pace, with the non-oil sector driving growth as financial services, tourism, and manufacturing sectors demonstrate resilience. The kingdom's economic diversification initiatives and infrastructure projects provide support for continued expansion despite global uncertainties.

Inflation data chart

Inflation Trends

Region/Country Current Rate 1-Year Ago Central Bank Target
United States 4.9% 8.2% 2.0%
Eurozone 5.3% 8.9% 2.0%
United Kingdom 7.9% 10.1% 2.0%
Japan 3.1% 2.8% 2.0%
China 0.7% 2.8% ~3.0%
Saudi Arabia 2.7% 3.1% N/A
UAE 3.1% 4.3% N/A
Bahrain 1.8% 3.5% N/A

Analysis

Inflation has moderated from the peak levels seen in 2022 but remains above central bank targets in most advanced economies. The decline has been driven primarily by easing supply chain pressures, lower energy prices compared to last year's peaks, and the impact of monetary tightening.

Core inflation, which excludes volatile food and energy prices, has proven more persistent, reflecting ongoing price pressures in services sectors and the impact of tight labor markets on wage growth. This core persistence complicates the outlook for monetary policy and may result in interest rates remaining higher for longer than markets initially anticipated.

Regional variations in inflation dynamics are significant. The United Kingdom faces particularly stubborn inflation, complicating the Bank of England's policy decisions. Japan is experiencing inflation above target after decades of deflationary pressures, leading to potential adjustment in the Bank of Japan's ultra-accommodative stance. China, conversely, is experiencing very low inflation and even deflationary pressures in some sectors, reflecting weak domestic demand.

In the GCC region, including Bahrain, inflation has generally been lower than in advanced economies, partly due to currency pegs to the US dollar, subsidies on essential goods and services, and specific measures to control price increases. This more moderate inflation environment provides some economic advantages for the region, though it also reflects the transmission of US monetary policy through the currency pegs.

Labor market data chart

Labor Market Indicators

Region/Country Unemployment Rate Employment Growth (YoY) Wage Growth (YoY)
United States 3.6% 2.1% 4.4%
Eurozone 6.5% 1.3% 4.1%
United Kingdom 4.2% 0.9% 7.8%
Japan 2.5% 1.0% 2.2%
China 5.2% 0.4% N/A
Saudi Arabia 5.8% 2.5% N/A
UAE 3.1% 3.2% N/A
Bahrain 4.7% 1.9% N/A

Analysis

Labor markets have demonstrated remarkable resilience in the face of economic headwinds, with unemployment rates remaining low in most advanced economies despite monetary tightening. This resilience reflects several factors, including post-pandemic labor hoarding by employers who faced hiring challenges, structural labor shortages in many sectors, and the lagged impact of monetary policy on employment.

Wage growth has accelerated in response to tight labor markets and high inflation, though in most countries it remains below inflation rates, resulting in real wage declines. This dynamic may be shifting as inflation moderates while nominal wage growth remains elevated, potentially supporting consumer spending power in the coming quarters.

Labor market dynamics vary significantly across regions. The United States maintains a particularly tight labor market with the ratio of job openings to unemployed workers still above pre-pandemic levels. European labor markets have shown surprising strength, with unemployment in the Eurozone at record lows despite modest economic growth. Japan faces structural labor shortages due to demographic factors, contributing to the historically low unemployment rate.

In GCC countries, labor market policies focus increasingly on expanding private sector employment for nationals, with initiatives to enhance workforce skills and reduce reliance on public sector employment. Bahrain's labor market shows progress in these efforts, with growing private sector employment for Bahraini nationals, though challenges remain in addressing skill mismatches and enhancing productivity.

Monetary policy chart

Monetary Policy Settings

Central Bank Policy Rate Change YTD Next Meeting
US Federal Reserve 5.25-5.50% +100 bps Sept 20, 2023
European Central Bank 3.75% +175 bps Sept 14, 2023
Bank of England 5.25% +175 bps Sept 21, 2023
Bank of Japan -0.10% No change Sept 22, 2023
People's Bank of China 3.55% -10 bps N/A
Saudi Arabian Monetary Authority 5.50% +100 bps Follows Fed
Central Bank of UAE 5.40% +100 bps Follows Fed
Central Bank of Bahrain 5.50% +100 bps Follows Fed

Analysis

Monetary policy tightening cycles are approaching their peak in most advanced economies, though the terminal rate and duration of restrictive policy remain uncertain. The Federal Reserve has indicated that future rate decisions will be data-dependent, with inflation progress and labor market conditions key determinants of the policy path.

Policy divergence is becoming more evident, with the Bank of Japan maintaining its ultra-accommodative stance while others tighten, though adjustments to yield curve control suggest potential future shifts. The People's Bank of China has moved toward modest easing to support the recovery, though its approach remains measured given concerns about financial stability and currency depreciation.

Market focus is increasingly shifting from the magnitude of additional rate hikes to the duration of restrictive policy. Central bank communications suggest rates will remain elevated until there is convincing evidence that inflation is sustainably returning to target, potentially resulting in a "higher for longer" scenario rather than the rapid easing cycle that markets had previously anticipated.

For GCC countries with currencies pegged to the US dollar, including Bahrain, monetary policy largely follows the Federal Reserve's actions. This alignment creates a potential policy challenge when domestic economic conditions might warrant different approaches. However, other policy tools, including macroprudential measures and fiscal policy, provide some flexibility to address specific domestic considerations while maintaining the currency pegs.

Regional Focus: GCC Economies

GCC economic indicators

GCC Economic Performance

The Gulf Cooperation Council economies continue to demonstrate resilience amid global economic challenges, benefiting from relatively strong fiscal positions, ongoing economic diversification efforts, and strategic investments in future growth sectors.

Country GDP Growth 2023 (f) Inflation 2023 (f) Fiscal Balance (% GDP) Current Account (% GDP)
Saudi Arabia 2.1% 2.8% 0.4% 5.8%
UAE 3.5% 3.2% 3.2% 8.5%
Qatar 2.4% 2.9% 5.7% 12.3%
Kuwait 2.6% 2.5% 1.8% 14.6%
Oman 1.8% 1.7% 0.2% 4.1%
Bahrain 3.1% 1.8% -2.1% 3.7%

Bahrain Economic Indicators

Bahrain's economy continues to demonstrate resilience and progress in its diversification efforts, with the non-oil sector driving growth momentum. Key economic indicators for Bahrain highlight several important trends:

Non-Oil Growth

3.7% YoY

Accelerating
Financial Sector Growth

4.2% YoY

Stable
Tourism Arrivals

+28% YoY

Recovering
Private Sector Employment (Nationals)

+3.2% YoY

Improving

Analysis

The GCC region's economic outlook remains relatively favorable compared to many other regions, though growth has moderated from the exceptionally strong performance of 2022. This moderation reflects lower oil production in some countries following OPEC+ decisions, as well as the impact of global monetary tightening and reduced fiscal stimulus compared to the post-pandemic period.

Economic diversification progress continues across the region, with varying approaches and success rates. The UAE demonstrates the most diversified economy in the region, with non-oil sectors contributing over 70% of GDP. Saudi Arabia's Vision 2030 initiatives are accelerating diversification efforts, with significant investments in tourism, entertainment, and technology sectors.

Bahrain's economy continues to evolve, with the financial sector, manufacturing, tourism, and digital economy showing particular strength. The kingdom's Economic Vision 2030 emphasizes sustainable diversification, private sector growth, and enhancing productivity and innovation. Recent fiscal reforms have improved the trajectory of public finances, though challenges remain in achieving fiscal balance.

Regional integration initiatives, including infrastructure projects connecting GCC countries and harmonization of regulations in various sectors, provide additional support for economic development. These collaborative efforts enhance the region's attractiveness for international investment and facilitate intra-regional trade and business activity.

Economic Calendar

Full Calendar
Date Time Region Event Importance
Aug 24, 2023 8:30 ET United States Initial Jobless Claims Medium
Aug 25, 2023 8:30 ET United States PCE Inflation Index High
Aug 30, 2023 5:00 ET Eurozone Consumer Confidence Medium
Aug 31, 2023 3:00 ET China Manufacturing PMI High
Sept 1, 2023 8:30 ET United States Nonfarm Payrolls High
Sept 5, 2023 10:00 ET United States ISM Services PMI Medium
Sept 7, 2023 7:45 ET Eurozone ECB Rate Decision High
Sept 10, 2023 8:30 ET Bahrain Q2 GDP Final Medium