- Record growth for transport and storage
- Finance and insurance contribute 17%
- UN hails kingdom’s tech growth
Bahrain’s economy expanded by 1.3 percent in the second quarter of 2024, thanks to double-digit growth in some of its non-oil sectors.
The ministry of finance and national economy said 2.8 percent growth in its non-oil sector, which accounted for 85 percent of gross domestic product in Q2, helped to offset a 6.7 percent decline in its oil sector.
Bahrain’s transportation and storage industry grew by a record 13 percent in the second three months of the year, while information and communications grew 11 percent in the quarter.
The ministry said rising demand in tourism helped accommodation and food services grow 10.6 percent in the quarter.
The financial and insurance sector, the kingdom’s largest contributor to its economy at 17 percent, recorded a 2 percent growth year on year, while manufacturing grew 1.7 percent.
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Bahrain’s foreign direct investment stock increased by 9 percent, reaching a total value of BHD16.6 billion ($44 billion).
The ministry expects the economy to grow by 3 percent this year, primarily supported by non-oil sectors.
Despite the highest debt-to-GDP ratio in the GCC, Bahrain is expected to hold off on introducing corporate tax for as long as possible in order to maintain its competitive edge on Gulf rivals, a company formation expert told AGBI last month, citing discussions with the kingdom’s minister of finance.
Bahrain recently introduced a 15 percent tax targeting large multinational companies with revenues exceeding €750 million ($830 million), set to take effect in January.
The kingdom’s growth as a global technology centre was reflected in the UN E-Government Survey 2024, in which it rose 36 places to 18th in the world.
The report, which was published by the UN’s department of economic and social affairs, said: “Bahrain has established itself as a digital development leader through inclusive and multifaceted approaches.”
“Initiatives like hackathons, fintech hubs, and the Regulatory Sandbox demonstrate Bahrain’s commitment to accountable governance and sustainable development,” the report said.
The government’s adoption of a cloud-first approach has reduced infrastructure costs and improved public services efficiency, the report said.
Platforms such as Sijilat, an online commercial registration portal, “streamline business registration, promoting entrepreneurship and economic growth,” it said.