Bahrain has significant potential to expand its exports to Germany, particularly in iron and steel products, aluminium and other manufactured goods, the Bahrain Chamber has highlighted.

The official representative body of the private sector in Bahrain has come out with a Trade in Focus report on Germany which identifies sectors such as healthcare, energy, environmental technologies, consumer industries, finance, machinery and equipment, automotive, and ICT as promising sectors with high growth potential.

Trade between Bahrain and Germany has grown steadily, reaching $608 million in 2022. While overall volume remained stable, Bahrain’s exports to Germany skyrocketed by 667 per cent in the last five years, highlighting the potential for further collaboration, the report underlines.

Bahrain’s exports to Germany are diversifying, with unwrought aluminum alloys leading the way, followed by aircraft engine parts. Germany remains a significant import partner for Bahrain, with medicaments, cars, and machinery among the top imported products.

The kingdom’s top export potential to Germany is in agglomerated iron ores and concentrates, ferrous products obtained from iron ore, and non-alloyed aluminium wire according to the International Trade Center’s Export Potential Map which collaborates with Export Bahrain.

The ICT trade potential tool calculates the potential trade gap as supply x demand (corrected for market access) x bilateral ease of trade. Supply and demand are projected into the future based on GDP and population forecasts, demand elasticities, and forward-looking tariffs (International Trade Centre, 2022).

The top product with untapped export potential from Bahrain to Germany is agglomerated iron ores and concentrates with an export gap of $95m, followed by ferrous products obtained from iron ore, with an export gap of $4.9m.

The third major commodity is non-alloyed aluminium wire with an export gap of $3.8m. Other potential exports from Bahrain to Germany include methanol and cotton bedlinen.

The top product with untapped import potential from Germany to Bahrain is passenger motor vehicles with an import gap of $30m. The second major product is parts and accessories of motor vehicles, with an untapped import potential of $8.3m.

The third major product with untapped import potential is medicaments consisting of mixed or unmixed products, with an import gap of $4.9m. Other potential imports from Germany to Bahrain include appliances for pipes, boards for electric control, and data processing machines.

Furthermore, Germany is Bahrain’s 9th biggest import partner and ranks 23rd in terms of exports.

With particular strengths in the financial services, technology innovation, manufacturing and logistics sectors, the kingdom’s economy is the most diversified in the GCC region.

Leveraging Bahrain’s diversified economy and Germany’s technological prowess can create mutually beneficial opportunities, the report suggests.

The two countries have already signed several agreements to cooperate in different areas and by working together, they could both benefit from each other’s strengths.

Germany’s economic powerhouse relies on several key industries. Automotive giants like Volkswagen and Daimler dominate the scene, exporting vehicles and components worldwide. Advanced manufacturing thrives with Siemens and BASF leading the way, producing everything from machinery to chemicals.

The healthcare industry, especially MedTech, is a European leader, attracting international companies and boasting cutting-edge research. Sustainability is a major focus, with Germany aiming for 60% renewable energy by 2050.

Consumer goods are another strong point, with stable spending and a central European location offering access to a vast market. The financial sector holds an AAA ranking, bolstered by a diversified banking landscape and Frankfurt’s status as a leading financial centre.

Robotics and automation are revolutionising German industry, particularly in automotive and electronics. The country leads the world in industrial machinery production, showcasing its innovative spirit.

Looking ahead, Germany is focusing heavily on electric vehicles, with major manufacturers exploring various options to lead the transition. The ICT sector, representing nearly a quarter of the European market, is also a priority, driving digitization and green technology.

Overall, Germany’s vibrant and diverse industrial landscape positions it as a global economic powerhouse, continuously adapting and innovating to meet future challenges.

Moving forward, strengthening economic ties through investment and collaboration can unlock the full potential of the Bahrain-Germany trade relationship, the report concludes.

 

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