HSBC economists warned that “fragilities are lurking” beneath the global economy’s surprising resilience, stressing that Bahrain’s continued growth is dependent on accelerated fiscal and productivity reforms.
The cautionary message came during the 2025 HSBC Global Economist Roadshow in Bahrain, which convened business leaders to analyse global and regional prospects.
HSBC chief economist for Europe Simon Wells acknowledged the global economy’s strength, stating that leading indicators suggest resilience will continue into the fourth quarter. However, he urged caution.
“Despite extreme uncertainty, the global economy has been remarkably resilient this year... But scratch below the surface and fragilities are lurking,” Wells warned. “Growth in household spending is weak in many economies, and we may not yet have seen the full impact of tariffs. Meanwhile, slow growth and higher interest rates are exposing fiscal vulnerabilities. The resilience has been welcome, but there is no room for complacency.”
Adding to the global currency outlook, HSBC global head of FX research Paul Mackel predicted further pressure on the US currency. “The US Dollar has had a volatile year so far... The outlook still points to a soft USD in the months ahead.”
Focusing on the regional landscape, Simon Williams, HSBC chief economist for CEEMEA, reaffirmed Bahrain’s unique position while underscoring the need for action.
“Bahrain remains the most diversified economy in the region and will continue to attract significant capital flows from offshore,” Mr Williams said. He stressed that near-term growth is “tied to accelerated progress with the fiscal reform programme and long term to delivery on promised measures to boost productivity and competitiveness. Delivering on this agenda will require sustained coordination and commitment across stakeholders.”
Joseph Ghorayeb, chief executive officer of HSBC Bahrain, opened the event by asserting that the kingdom’s economic stability is a magnet for investment. “Bahrain’s decades of forward-looking diversification have built stronger investor confidence and positioned the kingdom as a leading destination for investment,” he said.
Mr Ghorayeb reaffirmed HSBC’s role as a key partner: “Our mission is to empower Bahraini companies to expand globally and attract international investment that advances the kingdom’s vision. Furthermore, through HSBC Private Banking, we continue to meet the growing demand for sophisticated wealth management.”
avinash@gdnmedia.bh
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