Bahrain’s economy is projected to expand by 3.5% in 2025 and moderate to 3% in 2026, according to the World Bank’s latest regional forecast. The outlook aligns with broader growth expectations across the GCC, where economic activity is set to accelerate to 3.2% in 2025, rising further to 4.5% in 2026 and 4.8% in 2027.

The rebound is expected as oil production gradually increases following the rollback of output cuts, although global oil prices are likely to soften due to weaker demand.

In the wider Middle East and North Africa region, growth is projected to reach 2.7% in 2025, improving to 3.7% in 2026 and 4.1% by 2027.

Last month, Bahrain’s Ministry of Finance reported a 3.4% year-on-year GDP growth in the fourth quarter of 2024. The expansion was driven by a robust 4.6% rise in non-oil sectors, partially offset by a 3.5% contraction in oil-related activities, as reported by the Information and eGovernment Authority.

For the full year 2024, Bahrain’s economy grew by 2.6%, with the government expecting growth to edge up to 2.7% in 2025.

This projection is supported by a 3.4% increase in non-oil activity, underpinned by the launch of the Bapco Modernization Program—one of the country’s largest energy infrastructure investments. The program is expected to boost refinery output and enhance fiscal revenues as part of Bahrain’s broader diversification agenda.

Despite the positive growth outlook, concerns remain. In April, S&P Global revised Bahrain’s credit outlook from “stable” to “negative,” citing tightening global financial conditions and rising debt servicing costs that could strain public finances.