Bahrain's economy grows 2.5% in Q2 as non-oil sectors lead expansion

08/10/2025 03:49 AST

Bahrain's economy expanded 2.5 percent year on year in the second quarter of 2025, fueled by robust non-oil activity that continued to anchor growth, official data showed.

The Information and eGovernment Authority and the Ministry of Finance and National Economy reported that non-oil sectors grew 3.5 percent, accounting for over 85 percent of real gross domestic product, the Bahrain News Agency reported.

Bahrain's performance builds on reforms under the Economic Recovery Plan, launched in October 2021 to accelerate post-pandemic growth and fiscal sustainability as part of the Economic Vision 2030 strategy.

It also aligns with broader regional trends, as Gulf economies sustain steady non-oil expansion.

"The Kingdom continues to achieve notable progress in international economic and development indicators, reflecting the success of its economic diversification strategies and efforts to enhance the business environment," BNA reported.

The latest figures showed that professional, scientific, and technical services led the upturn with a 12 percent increase, followed by wholesale and retail trade up 6.7 percent, and real estate rising 4.7 percent.

Accommodation and food services advanced 4.6 percent, while gains were also recorded in information and communications, construction, finance, and manufacturing, underscoring broad-based momentum outside hydrocarbons.

Foreign investment indicators strengthened alongside output. Inward foreign direct investment stock increased 5.4 percent year on year in the second quarter of 2025 to 17.5 billion Bahraini dinars ($46.4 billion), reflecting continued capital inflows into the non-oil economy.

The second quarter's growth builds on a solid first-quarter outturn, when Bahrain's real GDP rose 2.7 percent year on year, underpinned by a 2.2 percent expansion in non-oil activity and a 5.3 percent rise in oil output, according to official data.

In nominal terms, GDP increased 3 percent, with the non-oil and oil sectors up 2.8 percent and 4.6 percent, respectively. Non-oil industries remained the economy's anchor, contributing 84.8 percent to real GDP.

Bahrain ranked first among Arab countries in Gallup's Global Safety Report 2025 Law and Order Index, with 90 percent of respondents reporting feeling safe at night.

The country recorded the largest improvement in the North Africa and Western Asia region in the Global Innovation Index 2025, climbing 10 places.

It also ranked fifth in the 2025 Greenfield FDI Performance Index and fifth in the Finance Skills Indicator in the IMD World Talent Ranking.

Across the Gulf in the second quarter of the year, Saudi Arabia's GDP rose 3.9 percent year on year, Abu Dhabi's economy grew 3.8 percent, driven by a 6.6 percent rise in non-oil sectors, and Oman recorded 2.1 percent growth, supported by diversified activity - highlighting continued regional momentum in economic diversification efforts.

Arab News