Bahrain flag Bahrain: Economic and Political Overview

Foreign trade figures of Bahrain

Foreign Trade in Figures

The Kingdom of Bahrain is very open to foreign investment and has one of the highest FDI stock-to-GDP ratios in the region. According to UNCTAD's World Investment Report 2023, FDI in Bahrain increased by 9.7% year on year in 2022, to USD 1.95 billion. In the same period, the FDI stock reached USD 35.4 billion, around 79.8% of the country’s GDP. According to governmental data, FDI inflows in 2022 were dominated mostly by electricity, gas steam & air conditioning supply, manufacturing and financial & insurance activities sectors. Kuwait was the main investor, followed by the UAE and Guernsey. Data from the Bahrain Economic Development Board show that the agency secured USD 1.7 billion in FDI projects in 2023. In 2023, the financial services sector saw unprecedented investment, showcasing its robustness and capacity to attract top global players, overtaking oil and gas to become Bahrain's leading economic contributor, comprising 17.5% of real GDP. The ICT sector also garnered significant investment interest, with manufacturing following closely behind.

Bahrain enjoys an open and attractive economic and regulatory environment for international companies looking for a gateway to Gulf and Middle East markets. The country has the lowest corporate and personal taxes in the Gulf, without any restrictions for free trade zones. Foreign business ownership is fully permitted in more than 95% of all economic activities, eliminating the need to resort to a local partner in most cases. There are no limitations on the repatriation of capital, profits, or dividends, except for income generated by companies in the oil and gas sector, which are subject to a 46% tax rate on profits. The excellence of the country’s logistical infrastructure is also a major factor of attraction. Moreover, Bahrain offers a large, highly skilled pool of financial workers, a regulatory structure that is both advanced and internationally well-regarded, and a physical connection to Saudi Arabia – by far the largest economy in the Gulf. Beside a strong regional competition, FDI in Bahrain has been limited by the slow advancement of the privatization program and a rigid labor market. The absence of true reconciliation between the Sunni monarchy and the predominantly Shiite opposition constitutes a hindrance to FDI. Moreover, new emerging trade centers in the Gulf increased the competition to become a regional financial crossroad. Bahrain is a significant economic hub in the Gulf Cooperation Council (GCC) area and offers one of the most accommodating investment climates to draw in foreign companies. The national currency is freely transferable and tied to the US dollar. Bahrain ranks 67th among the 132 economies on the Global Innovation Index 2023 and 54th out of 184 countries on the latest Index of Economic Freedom.

 
Foreign Trade Values 20182019202020212022
Imports of Goods (million USD) 14,87113,25612,68314,18815,537
Exports of Goods (million USD) 18,04418,12014,06622,36930,194
Imports of Services (million USD) 8,0778,0839,26310,2898,582
Exports of Services (million USD) 12,24911,76511,49713,22511,571

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20172018201920202021
Foreign Trade (in % of GDP) 143.1150.8141.7140.2159.8
Trade Balance (million USD) -700-1,066n/an/an/a
Trade Balance (Including Service) (million USD) 2,8562,910n/an/an/a
Imports of Goods and Services (Annual % Change) 7.65.7-5.6-0.715.2
Exports of Goods and Services (Annual % Change) 3.73.30.4-2.529.5
Imports of Goods and Services (in % of GDP) 67.371.665.267.370.2
Exports of Goods and Services (in % of GDP) 75.879.376.572.989.6

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20232024 (e)2025 (e)2026 (e)2027 (e)
Volume of exports of goods and services (Annual % change) 2.84.92.81.01.1
Volume of imports of goods and services (Annual % change) 1.13.62.51.11.1

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Member of Gulf Cooperation Council (GCC)

Member of Arab League.

The country is also part of the Greater Arab Free Trade Area (GAFTA), a pact of the Arab League entered into force in January 2005 which aims to form an Arabic free trade area.

 

Main Partner Countries

Main Customers
(% of Exports)
2022
Saudi Arabia 13.7%
United States 8.6%
United Arab Emirates 7.4%
Netherlands 3.5%
Oman 2.9%
See More Countries 63.9%
Main Suppliers
(% of Imports)
2022
China 14.5%
Brazil 10.6%
Australia 8.7%
United Arab Emirates 8.3%
United States 6.5%
See More Countries 51.5%

Source: Comtrade, 2023. Because of rounding, the sum of the percentages may be smaller/greater than 100%.

 
 

Main Products

22.3 bn USD of products exported in 2022
Unwrought aluminiumUnwrought aluminium 23.9%
Iron ores and concentrates, incl. roasted iron...Iron ores and concentrates, incl. roasted iron pyrites 9.7%
Aluminium wire (excl. stranded wire, cables,...Aluminium wire (excl. stranded wire, cables, plaited bands and the like and other articles of heading 7614, electrically insulated wires, and strings for musical instruments) 3.2%
Plates, sheets and strip, of aluminium, of a...Plates, sheets and strip, of aluminium, of a thickness of > 0,2 mm (excl. expanded plates, sheets and strip) 2.2%
Mineral or chemical nitrogenous fertilisers (excl....Mineral or chemical nitrogenous fertilisers (excl. those in pellet or similar forms, or in packages with a gross weight of <= 10 kg) 1.9%
See More Products 59.2%
15.5 bn USD of products imported in 2022
Iron ores and concentrates, incl. roasted iron...Iron ores and concentrates, incl. roasted iron pyrites 12.0%
Artificial corundum, whether or not chemically...Artificial corundum, whether or not chemically defined; aluminium oxide; aluminium hydroxide 8.0%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 4.8%
Parts suitable for use solely or principally with...Parts suitable for use solely or principally with internal combustion piston engine of heading 8407 or 8408 3.1%
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 2.6%
See More Products 69.6%

Source: Comtrade, 2023. Because of rounding, the sum of the percentages may be smaller/greater than 100%.

 
 

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Latest Update: April 2024

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