The Ministry of Finance and National Economy has released Bahrain’s Economic Report for 2025, highlighting steady economic expansion led by robust growth in non-oil sectors despite continued softness in oil activity.
According to preliminary national accounts data issued by the Information and eGovernment Authority, Bahrain’s real GDP grew by 3.5 percent year-on-year in 2025.
This growth was primarily driven by a 4.1 percent expansion in non-oil activities, while oil-related sectors experienced a marginal contraction of 0.3 percent.
At current prices, GDP rose by 3.7 percent, supported by a stronger 5.3 percent increase in non-oil sectors, offsetting a 5.7 percent decline in oil activities.
Non-oil sectors lead economic momentum
The report underscores the increasing dominance of non-oil activities, which accounted for 85.8 percent of Bahrain’s GDP at constant prices during 2025.
Key sectors demonstrating strong annual growth included professional, scientific, and technical services, as well as accommodation and food services, both expanding by 6.4 percent.
Financial and insurance activities followed with a 5.6 percent increase, reflecting continued resilience in Bahrain’s financial services industry.
Other sectors also contributed positively to economic performance. Construction grew by 5.0 percent, while transportation and storage recorded a 4.7 percent increase.
Real estate activities rose by 4.3 percent, and wholesale and retail trade expanded by 4.2 percent. Meanwhile, education and manufacturing sectors posted growth rates of 4.0 percent and 3.7 percent, respectively, illustrating broad-based expansion across the economy.
Image via BNA | Cropped by GBN
Strong end to the year and rising investment
Economic activity accelerated in the fourth quarter of 2025, with real GDP growing by 4.6 percent year-on-year. This was driven by a notable 7.4 percent surge in non-oil activities, even as oil sectors contracted by 12.3 percent during the same period.
The report also highlighted a 1.8 percent year-on-year increase in total inward foreign direct investment (FDI) in the fourth quarter, bringing Bahrain’s total FDI stock to BHD 17.7 billion.
This reflects sustained investor confidence and the Kingdom’s ability to attract capital amid evolving global economic conditions.
Global competitiveness and digital leadership
Bahrain’s progress extended beyond domestic economic indicators, with the Kingdom achieving notable rankings in global indices.
It secured the top global position in e-commerce legislation in the Network Readiness Index 2025, published by the Portulans Institute.
Additionally, Bahrain ranked third globally in the Business Incentives pillar of the Innovators Business Environment Index 2026, released by StartupBlink.
The Kingdom also maintained its Group A classification in the GovTech Maturity Index 2025 issued by the World Bank Group, ranking 15th globally among 197 countries.
The latest economic data reinforces Bahrain’s ongoing success in diversifying its economy away from oil dependency. Continued reforms aimed at enhancing the business environment, strengthening regulatory frameworks, and promoting innovation-driven sectors are contributing to sustainable growth.
