Bahrain’s economy grew 2.1 percent during the third quarter of 2024 to BHD3.73 billion ($9.91 billion), driven by a 3.9 percent annual expansion in non-oil activities. According to the latest data from the Ministry of Finance and National Economy, Bahrain’s oil sector saw an 8.1 percent decline.
Bahrain’s economy is expected to grow by 2.7 percent in 2024. This growth will be driven primarily by a diverse range of non-oil activities, which is forecasted to expand by 3.4 percent during 2024.
As for 2025, real GDP growth will likely accelerate to 3.4 percent, coinciding with the operation of the Bapco Modernization Program. Meanwhile, non-oil activities should experience an even stronger expansion of 4.4 percent during 2025.
Non-oil sector contributes 86.4 percent of GDP
The non-oil sector played a major role in supporting Bahrain’s economic growth. The contributions of non-oil activities to real GDP reached 86.4 percent in Q3 2024, with a total value of BHD3.22 billion.
Financial and insurance activities remained the largest contributors to the economy, accounting for 17.7 percent, followed by manufacturing at 16 percent and public administration at 9.1 percent. The construction sector contributed 6.5 percent while the transportation and storage sector contributed 4.6 percent. Meanwhile, Bahrain’s real estate and wholesale and retail trade sectors recorded similar contributions to the economy at 4.1 percent and 4 percent, respectively.
In addition, the information and communications sector achieved the highest growth rate among non-oil activities at 11.9 percent. The total number of mobile subscribers grew from approximately 2.3 million in Q3 2023 to around 2.5 million in Q3 2024, representing an increase of 6.5 percent annually.
Bahrain’s economy aligns with regional growth levels. According to the IMF’s Regional Economic Outlook, GCC economic growth is projected to accelerate from an estimated 1.8 percent in 2024 to 4.2 percent in 2025, driven by the easing of OPEC+ production cuts and continued robust growth in the non-oil sector. Non-oil sector growth will likely reach 4 percent in 2025, up from around 3.7 percent in 2024.
Abu Sa’afa field maintenance reduces oil revenues
During Q3 2024, oil activities contributed 13.7 percent to Bahrain’s economy, with the sector recording a decline of 8.1 percent annually to BHD509.5 million. The ministry attributed this sharp decline to maintenance activities in the Abu Sa’afa field.
The average daily oil production from the offshore Abu Sa’afa field during the quarter dropped by 11.5 percent to 124,556 barrels per day. Moreover, extraction from the onshore Bahrain field declined by 2 percent to around 38,026 barrels per day
In nominal terms, oil activities saw a drop of 14 percent, driven by a decline in global oil prices. Brent crude averaged $79.8 during Q3 2024, decreasing by 7.9 percent annually after averaging $86.7 during Q3 2023.
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FDI grows to BHD16.5 billion
Inward investments into Bahrain’s economy continued to increase in Q3 2024, growing by 3.5 percent to BHD16.5 billion, up from BHD15.9 billion in Q3 2023. Financial and insurance services continued to attract the most FDI, with a share of 67.3 percent or BHD11.1 billion.
In terms of investment origins, Kuwait led the way with BHD5.8 billion, contributing 35 percent of total FDI stock in Bahrain’s economy. Saudi Arabia followed with investments of BHD3.6 billion, contributing 21.9 percent, and the UAE ranked third with an investment value of BHD1.8 billion.
