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|
 Manama skyline | |
| Currency | Bahraini dinar (BHD) |
|---|---|
| Calendar Year | |
Trade organisations | WTO andGCC |
Country group | |
| Statistics | |
| Population |  1,577,059 (2023)[3] |
| GDP | |
| GDP rank | |
GDP growth |
|
GDP per capita | |
GDP per capita rank | |
GDP by sector |
|
 0.9% (2024)[4] | |
Population belowpoverty line | N/A[6] |
Labour force | |
Labour force by occupation |
|
| Unemployment |
|
Main industries | OffshoreBanking andIslamic Banking,AluminumSmelting,Petroleum processing and refining,IronPelletization,Fertilizers,Insurance, Ship Repairing,Tourism |
| External | |
| Exports | $40.344 billion (2023 est.) |
Export goods | Aluminum,Petroleum and Petroleum Products,Textiles,Gold,Jewellery,Cheese |
Main export partners |
|
| Imports | $32.374 billion (2023 est.) |
Import goods | Crude Oil, Machinery,Chemicals,Gold,Jewellery |
Main import partners | |
Grossexternal debt | $60.58 billion (2024 est.)[4] |
| Public finances | |
| 134% of GDP (2024 est.)[4] | |
| Revenues |  $8.479 billion (2023) |
| Expenses | $10.532 billion (2023) |
| |
All values, unless otherwise stated, are inUS dollars. | |
Theeconomy ofBahrain has significantly diversified in recent years to no longer be dependent on oil and gas. As of 2024, the extraction of oil and natural gas is the third biggest sector in the economy.[14]Bahrain advocates for amixed economy system.[15][16] TheBahraini Dinar is the second-highest-valued currency unit in the world.[17] Since the late 20th century,Bahrain has heavily invested in thebanking andtourism sectors.[18] In 2008, Bahrain was named the world's fastest-growing financial center by the City of London'sGlobal Financial Centres Index.[19][20] Bahrain's banking and financial services sector, particularlyIslamic banking, have benefited from the regional boom driven by demand for oil.[21] Petroleum is Bahrain's most exported product, accounting for 60% of export receipts, 70% of government revenues, and 11% ofGDP.[22]Aluminum is the second most exported product, followed by finance and construction materials.[22]
According to the 2020 edition of theIndex of Economic Freedom, Bahrain has the fourth-freest economy in theMiddle East andNorth Africa region and is the 40th-freest economy in the world.[23] An alternative index places Bahrain at 70th place.[24] Bahrain was recognised by theWorld Bank as ahigh income economy.[25]
Oil and natural gas play a dominant role in Bahrain’s economy. Despite efforts to diversify the economy, according to the CIA World Fact Book, oil still comprises 85% of Bahraini budget revenues, meaning throughout the last few years, lower world energy prices have generated sizeable budget deficits - about 10% of GDP in 2017 alone.[26] Bahrain's economy depends on oil and gas, international banking, and tourism.[18]
In 2003 and 2004, the balance of payments improved due to rising oil prices and increased receipts from the services sector. As a result, the current account balance registered a surplus of US$219 million in 2003 and a surplus of US$442 million in 2004, compared to a deficit of US$35 million in 2002. Bahrain's gross international reserves increased substantially in 2004 to US$1.6 billion, up from US$1.4 billion in the previous three years (2001-2003).
ThoughCurrent GDP per capitaArchived 2012-05-04 at theWayback Machine shrank by 2.4% in the 1980s, it bounced back to a growth of 36% in the 1990s as a result of successful diversification initiatives. Bahrain's urgency in embracing economic liberalisation is due to its need to diversify the economy away from its limited oil supplies. Unlike its Persian Gulf neighbours, Bahrain has little oil wealth, and the economy has expanded intobanking, heavy industries,retail, andtourism. The Kingdom is the main banking hub for thePersian Gulf and a centre for Islamic finance, which has been attracted by the strong regulatory framework for the industry. According to theInternational Monetary Fund's Financial System Stability Assessment of Bahrain's financial regulatory environment, published on 6 March 2006, it found:
In 2005, Bahrain signed theUS-Bahrain Free Trade Agreement, becoming the first Persian Gulf state to sign such a bilateraltrade agreement with theUnited States. A massive privatization programme is underway to sell off key government assets: utilities, banks, financial services, andtelecommunications have started to come under the control of the private sector.
As a result, the economy has been well-positioned to exploit the extra revenues generated in the region, thanks to the sustained high oil prices since 2002. In January 2006, theUnited Nations Economic and Social Commission for Western Asia cited Bahrain as thefastest growing economy in the Arab world.
Between 1981 and 1993, the Bahrain Government's expenditures increased by 64%. During that same time, government revenues continued to be largely dependent on the oil industry and increased by only 4%. Bahrain has at times received significant budgetary support and project grants fromSaudi Arabia,Kuwait, and theUnited Arab Emirates.
The government has used its modest oil revenues to build an advanced infrastructure in transportation and telecommunications. Bahrain is a regional financial and business center.Tourism, especially from the region, has proved another significant source of income.
Bahrain has benefited from the oil boom since 2001, with economic growth of 5.5%. It has succeeded in attracting investment from other Persian Gulf states partly because it used the revenues of the 1970s-early 80s boom to invest in infrastructure development and other projects to improve the standard of living; health, education, housing,electricity, water, and roads all received attention.
The success of ventures such as theBahrain Grand Prix has raised the Kingdom's international profile, and combined with the boom inIslamic banking, has encouraged major airlines to resume services to the country, withLufthansa announcing on 14 March 2006 that it would schedulethree flights a week to Muharraq from FrankfurtArchived 2007-10-11 at theWayback Machine.
Bahrain has initiated a series of labour reforms under Minister of LabourMajeed Al Alawi to bring the labour market into line with international standards.
In 2009, it was announced that the Bahraini Government would be developing land next door to theBahrain International Circuit. The project being managed by @Bahrain is a mix of facilities including an exhibition and convention facility, a choice of hotel accommodations ranging from mid-market to luxury, a multi-purpose indoor arena, an automotive club and engineering facility, retail and leisure establishments, a tech-tainment (technology interacting with entertainment) centre, a research institute, a technology park and a focus on education and training. @Bahrain is part of the Mumtalakat group of companies and will dedicate more than 1 million square meters of business, entertainment and educational space with a value in excess of $2bn (BD 850 million), making it one of the largest investment projects to take place in Bahrain in the past five years.[27]
In July 2023, Bahrain's national origin exports decreased by 23%, valued at BD323 million, while imports fell by 6% to BD441 million, resulting in a trade deficit of BD68 million, according to the Information & eGovernment Authority (iGA) report.[28]
Overall during 2023, Bahrain's GDP grew by 2.45%, with the non-oil sector showing a robust increase of 4.48%, indicating the country's successful efforts towards economic diversification.[29] The Bahrain Economic Development Board played a crucial role in enhancing Bahrain's investment climate, actively facilitating the entry of international investors and expanding the sectors open to 100% foreign ownership, including significant initiatives in the oil and gas sectors under certain conditions.[30]
This is a chart of the trend of gross domestic product of Bahrain at market pricesestimated by the International Monetary Fund, with figures in millions of Bahraini Dinars.
| Year | Gross Domestic Product | US Dollar Exchange | Inflation Index (2000=100) |
|---|---|---|---|
| 1980 | 1,354 | 0.377 Bahraini Dinars | 74 |
| 1985 | 1,609 | 0.377 Bahraini Dinars | 90 |
| 1990 | 1,867 | 0.377 Bahraini Dinars | 89 |
| 1995 | 2,552 | 0.377 Bahraini Dinars | 98 |
| 2000 | 3,408 | 0.377 Bahraini Dinars | 100 |
| 2005 | 6,004 | 0.377 Bahraini Dinars | 105 |
| 2010 | 9,668 | 0.377 Bahraini Dinars | 120 |
| 2015 | 11,675 | 0.377 Bahraini Dinars | 133 |
| 2020 | 13,058 | 0.377 Bahraini Dinars | 139 |
For purchasing power parity comparisons, the US Dollar is exchanged at 0.30 Bahraini Dinars only. Mean wages were $19.81 perman-hour in 2009.
The following table shows the main economic indicators from 1980–2024.[31]
| Year | GDP (in bil. US$ PPP) | GDP per capita (in US$ PPP) | GDP (in bil. US$ nominal) | GDP growth (real) | Inflation (in Percent) | Government debt (in % of GDP) |
|---|---|---|---|---|---|---|
| 1980 | 7.3 | 20,779 | 3.6 | 7.5 % | 3.8 % | ... |
| 1985 | 11.4 | 27,186 | 4.3 | −0.9 % | −2.4 % | ... |
| 1990 | 14.7 | 30,044 | 5.0 | 3.5 % | 1.3 % | 8 % |
| 1995 | 20.5 | 36,705 | 6.8 | 1.9 % | 3.1 % | 14 % |
| 2000 | 28.0 | 43,920 | 9.1 | 7.0 % | −0.7 % | 26 % |
| 2005 | 40.4 | 45,440 | 16.0 | 6.8 % | 2.6 % | 24 % |
| 2010 | 58.2 | 47,117 | 25.7 | 4.3 % | 2.0 % | 30 % |
| 2011 | 60.6 | 50,673 | 28.8 | 2.0 % | −0.3 % | 33 % |
| 2012 | 65.9 | 54,489 | 30.7 | 3.7 % | 2.8 % | 36 % |
| 2013 | 67.7 | 54,035 | 32.5 | 5.4 % | 3.3 % | 44 % |
| 2014 | 68.3 | 51,938 | 33.4 | 4.4 % | 2.6 % | 44 % |
| 2015 | 62.5 | 45,627 | 31.1 | 2.5 % | 1.8 % | 66 % |
| 2016 | 63.8 | 44,834 | 32.2 | 3.8 % | 2.8 % | 81 % |
| 2017 | 71.3 | 47,486 | 35.5 | 4.9 % | 1.4 % | 88 % |
| 2018 | 74.5 | 48,424 | 37.8 | 2.0 % | 2.1 % | 90 % |
| 2019 | 77.5 | 50,118 | 38.7 | 2.0 % | 1.0 % | 97 % |
| 2020 | 78.7 | 48,166 | 34.6 | −5.9 % | −2.3 % | 126 % |
| 2021 | 82.7 | 48,357 | 39.3 | 4.3 % | −0.6 % | 122 % |
| 2022 | 93.9 | 49,482 | 44.4 | 6.0 % | 3.6 % | 111 % |
| 2023 | 100.1 | 57,213 | 46.1 | 3.0 % | 0.1 % | 123 % |
| 2024 | 105.6 | 57,503 | 47.8 | 3.0 % | 1.4 % | 126 % |
Petroleum andnatural gas are the only significant natural resources in Bahrain. Because of its limited reserves, Bahrain has worked to diversify its economy over the decade prior to 2004. Bahrain has stabilized its oil production at about 40,000 barrels (6,400 m³) per day, and reserves are expected to last 10 to 15 years. TheBahrain Petroleum Company refinery was built in 1935, has a capacity of about 250,000 barrels (40,000 m³) per day, and was the first in the Persian Gulf outside of Iran. After selling 60% of the refinery to the state-ownedBahrain National Oil Company in 1980,Caltex, a U.S. company, now owns 40%. Saudi Arabia provides most of the crude for refinery operations via pipeline. Bahrain also receives a large portion of the net output and revenues from Saudi Arabia's Abu Saafa offshore oilfield.
TheBahrain National Gas Company operates a gas liquefaction plant that utilizes gas piped directly from Bahrain's oilfields. Gas reserves should last about 50 years at present rates of consumption. TheGulf Petrochemical Industries Company (GPIC) is a joint venture of the petrochemical industries of Kuwait, the Saudi Basic Industries Corporation, and the Government of Bahrain. The plant, completed in 1985, producesammonia,methanol andurea for export.
Bahrain's other industries includeAluminum Bahrain, which operates an aluminum smelter—the largest in the world with an annual production of about 1,500,000 metric tons—and related factories, such as theAluminum Extrusion Company and theGulf Aluminum Rolling Mill Company (GARMCO)[2]. Other plants include theArab Iron and Steel Company's iron ore pelletizing plant (4 million tons annually) and a shipbuilding and repair yard.
International financial institutions operate in Bahrain, both offshore and onshore, without impediments. In 2001, Bahrain's central bank issued 15 new licenses. More than 100 offshore banking units and representative offices are located in Bahrain, as well as 65 American firms.Bahrain's international airport is one of the busiest in the Persian Gulf, serving 22 carriers. A port offers direct and frequent cargo shipping connections to the U.S., Europe, and the Far East. Notable Bahraini companies include Investcorp, a global investment firm founded in 1982 and headquartered in Manama, which has invested in various international brands such asGucci.
Taxation and import laws apply equally to Bahraini and foreign-owned companies, andforeign investors must comply with the same requirements and legislation as local firms.
Oil and gas companies are taxed 46 percent on income derived from the sale ofhydrocarbons and derivative products.
There is no personal income tax in Bahrain.
Employers and workers must pay social insurance contributions as follows:
(1) for old-age, disability and survivor protection: for Bahraini employees, since May 2022, employers pay 14% of salary plus constant allowances, the percentage will rise by 1% each year (up to 20% in 2028),[32] workers pay 7% plus constant allowances; for non-Bahraini employees, employers pay 3% of salary plus constant allowances (then being entitled only to employment injury benefits).
(2) for unemployment insurance: since June 1, 2007, all wages are subject to a 2% tax, paid for equally by the employer and the employee, applicable both to nationals and non-citizens, and supplemented by a government contribution of 1%. This makes Bahrain the first of theGCC countries to implement a UI scheme.
This article incorporatespublic domain material fromThe World Factbook (2025 ed.).CIA. (Archived 2006 edition.) This article incorporatespublic domain material fromU.S. Bilateral Relations Fact Sheets.United States Department of State.| Sovereign states |
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| States with limited recognition | |
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