Bahrain’s 2014 parliamentary elections on November 22 and 29 were held amid a mixed economic performance and prospects. Among the positive developments, there was the steady growth of the gross domestic product (GDP) and a relative fall in the debt burden.

The challenges include substantial unemployment among youths and the credit rating constraints.

The GDP grew by 4.9 per cent in the first-half of the year, which is certainly noteworthy. Reasons for the upbeat performance include solid government spending thanks in part to incoming GCC aid. Bahrain is a recipient of GCC financial assistance in the form of US$1 billion per annum for 10 years.

Approved in 2011, the scheme is designed to help the country cope with the socioeconomic causes of political challenges that have engulfed Bahrain since early 2011. A similar amount is extended to Oman.

Other factors contributing to economic growth incorporate the ability to entice visitors from Saudi Arabia. It is believed that some Saudi businesses opt to hold meetings in Bahrain, partly to take advantage of the country’s liberal environment. These events are often combined with the weekends for extended visits.

In addition, the debt debacle unexpectedly moderated following the partial retirement of outstanding debt over the past few months. Of late, the debt level compromises 39 per cent of the GDP, down from 44 per cent at the start of the year.

Another debt-related phenomenon concerns the issuance of sovereign bonds with exceptionally long-term maturity dates. In September, Bahrain issued a bond maturing in 30 years, a novelty that has inspired market participants.

In reality, the demand for the $1.25 billion was not bad at all, partly reflecting shortage of sovereign bonds emerging from the region as well as considering the backing from wealthy GCC countries. Investors were satisfied with the interest rate in the region of 6 per cent and overlooking the detail that Bahrain suffers from a negative outlook from Moody’s.

In fact, this negative outlook is the exception among GCC countries. Bahrain has ratings of Baa 2 and BBB on Moody’s and Standard & Poor’s S&P scales, the lowest within the GCC.

Yet, certain economic challenges require serious action, especially on joblessness, which stands at 7.4 per cent. The figure, released by the World Economic Forum (WEF) via the ‘Rethinking Arab Employment’ report is almost double that admitted by authorities. At 8.1 per cent, Oman suffers from the worst jobless rate within the GCC.

Still, joblessness among youths is exceptionally alarming, standing at 27.5 per cent, according to the WEF report. Again this is the second worst statistic within the GCC, though in this case behind Saudi Arabia.

Furthermore, Bahrain’s economy proved to be neither the best nor the worst performer among GCC countries in some recently-released international indexes. For instance, the 2014 Economic Freedom of the Arab World considers Bahrain’s economy the third freest among Arab countries after the UAE and Jordan. The report is produced by Friedrich Naumann Foundation for Liberty, International Research Foundation of Oman and Frazer Institute of Canada.

Also, ‘Business 2015’, produced by the World Bank Group, considers Bahrain as 53rd best economy for doing business in, considerably behind the UAE’s ranking of 22. Some 189 economies were included in the study, which looks into business regulations and the protection of property rights with regards to small and medium enterprises.

Undoubtedly, Bahrain’s new legislative body cannot overlook the serious economic challenges confronting the nation if only to avoid further complications.

The writer is a Member of Parliament in Bahrain.