 Manama skyline | |
| Currency | Bahraini dinar (BHD) |
|---|---|
| Calendar Year | |
Trade organisations | WTO andGCC |
Country group | |
| Statistics | |
| Population |  1,588,670 (2024)[3] |
| GDP | |
| GDP rank | |
GDP growth |
|
GDP per capita | |
GDP per capita rank | |
GDP by sector |
|
 0.3% (2025)[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 | $41.303 billion (2024 est.) |
Export goods | Aluminum,Petroleum and Petroleum Products,Textiles,Gold,Jewellery,Cheese |
Main export partners |
|
| Imports | $33.044 billion (2024 est.) |
Import goods | Crude Oil, Machinery,Chemicals,Gold,Jewellery |
Main import partners |
|
Grossexternal debt |  $60.58 billion (2024 est.)[4] |
| Public finances | |
| 142.5% of GDP (2025 est.)[4] | |
| Revenues |  $8.479 billion (2023) |
| Expenses | $10.532 billion (2023) |
| |
All values, unless otherwise stated, are inUS dollars. | |
Bahrain's economy has diversified in recent years to be less dependent on oil and gas, although they remain an important part of the economy.[14] As of 2024, the extraction of oil and natural gas is the third largest sector in the economy.[15] Bahrain advocates for amixed economy system.[16][17] Two examples of Bahrain’s advocacy for this system in the late 20th century are heavily investing in thebanking andtourism sectors.[18] In 2008, Bahrain was ranked highly in theGlobal Financial Centres Index (GFCI), which evaluates financial centres using survey responses and quantitative indicators.[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% ofgovernment 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] One alternative index providing the same statistics places Bahrain at 70th place.[24] Bahrain was recognized 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[26], oil still comprises 85% of Bahraini budget revenues, meaning that over the last few years, lower world energy prices have generated sizeable budget deficits - about 10% of GDP in 2017 alone.[27] 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).
Though current GDP per capita[28] shrank by 2.4% in the 1980s, it bounced back to a growth of 36% in the 1990s, resulting from diversification initiatives. Bahrain's urgency in embracing economic liberalization is due to its need to diversify the economy away from its limited oil supplies. Unlike its Persian Gulf neighbors, 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 center 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 was found that:
In 2005, Bahrain signed theUS-Bahrain Free Trade Agreement, becoming the first Persian Gulf state to sign such a bilateraltrade agreement with the United States. A large-scale privatization program 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 capitalize on the extra revenues generated in the region, due to the sustained high oil prices since 2002. In January 2006, theUnited Nations Economic and Social Commission for Western Asia cited Bahrain as the fastest-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 from Saudi Arabia, Kuwait, and the United Arab Emirates.[29]
The government has used its oil revenues to build an advanced transportation and telecommunications infrastructure. 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; healthcare, education, public services, and roads have seen improvement.[citation needed]
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 schedule three flights a week to Muharraq from Frankfurt.[30]
Bahrain has initiated a series of labor reforms under Minister of LaborMajeed Al Alawi to bring the labor market in line with international standards.
In 2009, it was announced that the Bahraini Government would be developing land next to theBahrain International Circuit. The project has been titled @bahrain. @bahrain is part of the Mumtalakat group of companies and will dedicate more than 1 million square meters to business, entertainment, and educational services, with a value in excess of $2bn (BD 850 million).[31]
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 & Government Authority (iGA) report.[32]
Overall, during 2023, Bahrain's GDP grew by 2.45%, with the non-oil sector increasing by 4.48%.[33]
This is a chart of the trend of gross domestic product of Bahrain at market prices estimated 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. Mean wages were $19.81 perman-hour in 2009.
The following table shows the main economic indicators from 1980–2024.[34]
| Year | GDP (in bil. US$ 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 present 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 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 include mining natural minerals. Some of the largest companies includeAluminum Bahrain, which operates the Bahrain Aluminum Extrusion Company and the Gulf Aluminum Rolling Mill Company (GARMCO). Other plants include the Arab 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 offers direct and frequent cargo shipping connections to the U.S., Europe, and the Far East. Notable Bahraini companies includeInvestcorp, a global investment firm founded in 1982 and headquartered in Manama, which has invested in various international brands such asGucci.[citation needed]
Taxation and import laws apply equally to domestic and foreign-owned companies. Furthermoreforeign investors must comply with the same requirements and legislation as domestic firms.[35]
Oil and gas companies are taxed 46 percent on income derived from the sale ofhydrocarbons and derivative products.[36]
Bahrain does not levy a personal income tax. However, individuals employed by a natural person or a legal entity or an enterprise in the Kingdom of Bahrain are subject to contributions to the Social Insurance Organization (SIO) rules in Bahrain.[36][37]
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),[38] 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 (2006 ed.).CIA. This article incorporatespublic domain material fromU.S. Bilateral Relations Fact Sheets.United States Department of State.| Sovereign states |
|
|---|---|
| States with limited recognition | |
| Dependencies and other territories | |
