Bahrain’s GDP to Grow 2.8% in 2025 Amid Diversification

Bahrain, 20 March, 2025 :  Bahrain’s economy is projected to expand by 2.8% in 2025 despite global economic challenges, according to the latest ICAEW Economic Insight report by Oxford Economics. The GCC region is expected to grow at 4%, up from 1.8% in 2024, showcasing resilience and ongoing diversification.

The report highlights Bahrain’s economic transformation, with the non-oil sector contributing 86% to GDP in 2024. Non-oil GDP is forecasted to grow 3.1% in 2025, driven by tourism, financial services, and insurance. Key projects, including a $427 million waterfront development and the $221 million Exhibition World Bahrain, aim to boost tourism.

To attract foreign investment, Bahrain is developing new industrial free zones in Muharraq and implementing incentives like the Golden Licence. Meanwhile, oil GDP, which declined 2.4% in 2024, is set to grow 0.9% in 2025, supported by the $6 billion Bapco Modernisation Programme.

Inflation is expected to rise to 2.8%, potentially affecting consumer spending, while debt remains above 100% of GDP. Fiscal reforms, including a 15% top-up tax on multinationals, aim to enhance stability. The report also notes potential trade policy shifts under the US administration, which could impact Bahrain’s economic landscape.

ICAEW’s Hanadi Khalife emphasized the GCC’s adaptability, citing strong investment in tourism and infrastructure as key drivers of growth.