Bahrain's small and medium enterprises (SMEs) will suffer significantly if the economic downturn in the country does not improve soon, said a top banking official.

Most SMEs have seen their turnover at least halved in the last few weeks, said Bahrain Development Bank (BDB) chief executive officer Nedhal Al Aujan.

Arabian Taxis, of which BDB has a 20 per cent stake, also experienced a 50 per cent lower than normal turnover last month.

He said SMEs already faced challenges such as rising costs and did not need additional pressures.

The expert believes if the situation is not addressed quickly there could be severe long-term implications.

'Bahrain's economy can recover, but the recession worldwide has already done enough damage and we need to move fast,' Al Aujan told our sister newspaper Gulf Daily News (GDN).

'I haven't seen any businesses relocating, but the situation shouldn't continue for the long-term because it will take time to rebuild confidence.

'We have seen a slowdown in business applications, even from locals, so the business environment has been affected and will be worse if it continues.'

Al Aujan said the whole of Bahrain's economy was contracting because uncertainty and instability was not conducive to business.

He said jobs had not been lost yet, but staff were being asked to take holidays because there was no business to be done.

'If there is no permanent resolution to the issue it will be painful for businesses and foreign businesses may think why should they bother,' said Al Aujan.

'People will start losing jobs if the national dialogue doesn't go ahead soon.

'We hope this is a very short-term phenomenon and we can get back on track soon.'

Al Aujan said the BDB was ahead of the targets that had been set towards Bahrain's Economic Vision 2030 goal and hoped the situation would not put them off track.

'If it continues we may need to look at our objectives for 2030, but I'm very sure we can achieve 2030,' he said.

'But SMEs do need to recover and we hope for the stopping of this phenomenon and get people back to work.'-TradeArabia News Service