Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Bahrain's economy is closely linked to the fluctuation in global crude oil prices as the rest of the region. However, its impact is much narrower compared to other Gulf countries due to the relatively diverse nature of the Bahraini economy. As such, the economy grew slightly by 2% in 2019 despite a sizeable contraction of the oil industry. Due to the COVID-19 pandemic, it plummeted to -4.9% in 2020 but came back to 2.2% in 2021 and 3.4% in 2022. GDP growth was expected to remain at 3% in 2023 and 2024, subject to the post-pandemic global economic recovery (IMF, January 2023). 

Continuing fiscal reforms and emphasing better-targeted subsidies under the Fiscal Balance Program (FBP) helped to narrow the fiscal deficit of the country. The substantial pandemic-related crisis package of US$11.3 billion introduced in March 2020, and an additional US$1.3 billion stimulus package in June 2021 to support the sectors hardest-hit by COVID-19, have further limited the country’s fiscal space, and aggravated already weak growth dynamics. More favorable oil market conditions were projected to narrow the fiscal deficit to 8.4% of GDP in 2021 (World Bank, 2021). In 2020-2021, a series of reforms were laid to balance the budget by 2022, but public debt grew to 129.7% of GDP in 2020, 128.5% in 2021 and 119.5% in 2022. It is expected to reach 121.7% and 124.3% in 2023 and 2024 respectively (IMF, January 2023), with sizable gross financing needs. On the other hand, Bahrain's pledge to monetize newly-discovered hydrocarbon reserves of up to 80 billion barrels and around 20 trillion cubic feet of tight natural gas within the next five years will improve its outlook. The non-oil primary balance is expected to keep improving in the back of higher non-oil revenues projected at 6.7% of non-oil GDP in 2020 (Word Bank). Inflation remained low in 2021 (-0.6%) but came back at 3.5% in 2022. It is expected to reach 3.5% in 2023 before coming down to 1.8% in 2024 (World Economic Outlook IMF, January 2023).

Persian Gulf nations, among the world’s richest at the turn of the century, have lost ground as the oil price receded. Bahrain, Kuwait, Oman and Saudi Arabia are all dropping out of the global top 20 as living standards stagnate or decline. Unemployment rate among nationals was estimated at 6.6% in 2021 in Bahrain, and 5.5% in 2022. It should remain at 4.4% in 2023 and 4% in 2024 according to the latest World Economic Outlook of the IMF (January 2023).

Foreign Trade

Bahrain's market constitutes one of the most diversified economies in the region. The country is very open to foreign trade, which accounted for 140% of the GDP in 2020 (World Bank, 2023). Petrochemical products account for over 60% of Bahraini exports, a share that is relatively low compared to the rest of the region. Bahrain has a strong steel and aluminium industry, accounting for up to 23.6% of exports. Petroleum products also account for the largest item of imports (30%), mainly crude oil imports from Saudi Arabia, followed by machineries, electrical and electronic equipment and cars and other vehicles.

Saudi Arabia is the top destination for Bahraini exports (17%), followed by the United Arab Emirates (9%), the United States (6%) and Oman (4.1%). Saudi Arabia was also the main supplier in 2021 (24% of total imports), followed by China (11.3%), Australia (5.7%) and the United Arab Emirates with 5.3% (Trade Economics, 2022).

Bahrain recorded a trade deficit of BD155 million (411.26 million USD) during 2022 compared to a deficit of BD643 million for the previous year (Zawya, 2023). Bahrain exports of goods stood at 22.36 billion USD in 2021, while imports increased from 12.68 billion USD to 14.18 billion USD in 2021 according to data from WTO. Exports of services increased to 13.22 billion USD in 2021, whereas imports of services increased to 10.28 billion USD (WTO, 2023).

The value of exports of Bahrain origin products increased 24%, reaching BD4.967 billion (13.18 billion USD) during 2022, compared to BD3.994 billion in the previous year. The value of imports into Bahrain increased 10% in 2022, reaching BD5.842 billion (15.5 billion USD), compared to BD5.316 billion for the previous year (Zawya, 2023).

COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Bahrain, please visit the Ministry of Health´s website.  
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures

To obtain the up-to-date information on the containment measures put in place and public health recommendations please consult the latest publications from the Ministry of Health.

Travel restrictions

The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.

Import & export restrictions

For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the Bahraini Customs. 
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Bahrain on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

Most of the economic measures taken by the Bahrain government to address the impact of the COVID-19 pandemic on the national economy are addressed here.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Bahrain government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Bahrain in the IMF’s Policy Tracker platform.

Support plan for businesses

For the updated information with regards to specific schemes in support of business companies following the coronavirus epidemic outbreak, please visit the website of the Ministry of Industry , Commerce & Tourism of Bahrain.
Additionnaly, some measures to support private sector can be found here. For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters

The country's government official sources do not provide yet information with regards to specific schemes in support of exporting companies following the coronavirus epidemic outbreak. For the updated information please visit the website of the Ministry of Industry, Commerce & Tourism of Bahrain.