Bahrain economy grows 4% in Q3 2025 as non-oil sectors drive expansion

Bahrain’s economy recorded year-on-year growth of 4.0 per cent in the third quarter of 2025, supported by solid non-oil sector performance and a rebound in oil activities, according to the latest Bahrain Economic Quarterly Report.

The report was published by the Ministry of Finance and National Economy and released on its official website on January 5. It draws on preliminary national accounts data issued by the Information and eGovernment Authority.

According to the findings, real gross domestic product expanded by 4.0 per cent in Q3 2025. Growth was driven by a 3.1 per cent increase in non-oil activities, alongside a sharper rise of 9.3 per cent in oil-related activities.

Despite the stronger oil growth, the report underlined the continued dominance of the non-oil economy, which accounted for 85.0 per cent of real GDP during the quarter.

Non-oil economy powers continued growth

Among non-oil sectors, real estate delivered the strongest performance, recording growth of 5.4 per cent year on year. Financial and insurance activities followed closely with growth of 5.0 per cent, reflecting continued momentum in Bahrain’s financial services sector. Transportation and storage, along with construction, each expanded by 4.4 per cent.

Manufacturing also posted solid growth of 3.9 per cent, while wholesale and retail trade grew by 3.3 per cent. Information and communication activities rose by 2.1 per cent, and accommodation and food services increased by 1.5 per cent, pointing to steady expansion across a broad range of economic activities.

The report also highlighted positive developments in foreign investment. Inward foreign direct investment stock increased by 5.8 per cent year on year in Q3 2025, reaching a total of BHD17.5 billion (US$46.43 billion). The ministry said this reflected investor confidence in Bahrain’s economic environment and diversification strategy.

Bahrain’s progress was further reflected in a number of international rankings. The Kingdom ranked third globally in dispute resolution in the Business Ready 2025 report issued by the World Bank, underscoring the strength of its legal and regulatory framework.

In addition, Bahrain led the Middle East and North Africa region in combatting human trafficking, earning a Tier 1 classification for the eighth consecutive year in the Trafficking in Persons 2025 report published by the US Department of State. It was the only country in the region to receive this rating.

The Kingdom also ranked first in the Gulf and second among Arab countries for economic freedom, according to the Economic Freedom of the World 2025 report issued by the Fraser Institute, reinforcing its standing as a competitive regional business hub.