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BAHRAIN'S FREE TRADE BOOSTS COMMERCE.

Bahrain and the United States are slated to enter into free trade negotiations starting in January of 2004. Bahrain has a small geographical area (266 square miles) and low population (0.7 million), but has emerged as one of the GCCs financial and commercial hubs.

This year, the value of trade between Bahrain and the US should approach US$1 billion and it should rise further in 2004 and 2005 as the free trade agreement enters the implementation phase. The following categories of imported products stand to benefit most from the agreement: food products, machinery, sports equipment, and vehicles.

Bahrain has purchasing power parity per capita of US$14,200 but the average household has disproportionately high discretionary income. As a result, the great majority of families are able to cover basic expenses with enough left over to purchase household appliances. Consumer confidence sagged during the 2003 Iraq conflict but rebounded by midyear as regional trade picked up.

Over the next 12 months, the low cost of financing and easy access to credit will create a climate that favors high-end consumption. Look for sales of major household appliances to rise by 3 to 5 percent year-on-year late this year before rising slightly above that range during the second quarter of 2004. Bahraini demand for goods and services tends to be more stable than in other GCC nations because its export base is well diversified and less affected by the vagaries of international petroleum prices.
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Publication:Market Africa Mid-East
Article Type:Brief Article
Geographic Code:7BAHR
Date:Nov 1, 2003
Words:244
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