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Bahrain emerges as a business destination
Relatively low inflation and interest rate cuts in September and November 2024 enhance its appeal as a business destination
- PUBLISHED: Mon 20 Jan 2025, 1:31 PM UPDATED: Mon 20 Jan 2025, 1:47 PM
Bahrain's economy is experiencing growth, guided by Bahrain Economic Vision 2030 - the kingdom's long-term socio-economic development plan, and driven by a dynamic private sector and rising foreign investment.
The kingdom of Bahrain is expected GDP growth is expected to accelerate this year from last, surpassing the average rate of 1.9% from 2014 to 2023. The energy sector is anticipated to rebound after its output was limited last year due to maintenance activities at the Abu Sa'afa oilfield. Moreover, the non-energy sector is likely to maintain its strong expansion on robust tourism and finance activity.
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The country's robust financial services sector supports private sector diversification, while the Central Bank of Bahrain fosters a favourable fiscal and regulatory environment, focusing on start-ups and small and medium-sized enterprises. Multi-sector growth has insulated the economy from global energy price fluctuations, a trend likely to continue with ongoing infrastructure development and talent investments.
Despite fiscal challenges and sector declines, Bahrain's investment-friendly environment, along with a future-ready workforce, positions the kingdom well to attract more international companies. Additionally, deepening the stock markets is a priority to diversify the economy and further boost growth in the coming years.
LONG-TERM TRENDS (%)
| 2025 | 2026 | 2027 | 2028 | 2029 | |
| Real GDP growth | 3.2 | 2.9 | 2.8 | 2.8 | 2.9 |
| Hydrocarbon growth | - | -1.4 | -2.6 | -2.7 | -2.3 |
| Non-hydrocarbon growth | 3.7 | 3.6 | 3.6 | 3.6 | 3.6 |
| Inflation | 1.8 | 2.0 | 2.0 | 2.0 | 2.0 |
| Population growth | 2.5 | 2.5 | 2.5 | 2.5 | 2.5 |
Numbers Matter
$27,879: Projected GDP per Capita for 2025
$6.2 Billion: Estimated central bank reserves in 2025
Strengths
> Commitment to diversifying the economy
> Significant oil reserves
> Financial support from Gulf allies
Sectors to Watch
• Finance
• Hospitality
• Trade
• Real Estate
• Construction
