Bahrain recorded notable economic growth in the second quarter of 2025, according to the Ministry of Finance and National Economy. The latest data highlights how the Kingdom continues to expand beyond oil, strengthening its position as a diversified regional economy.
Preliminary national accounts from the Information and eGovernment Authority indicate that Bahrain’s GDP grew by 2.5% in Q2 2025. Non-oil activities contributed significantly, expanding 3.5% and representing 85.2% of the real GDP. This demonstrates Bahrain’s strategic shift toward economic diversification.
Among the non-oil sectors, Professional, Scientific, and Technical activities grew the fastest, posting a 12% increase. Wholesale and Retail Trade rose 6.7%, while Real Estate activities expanded by 4.7%. Accommodation and Food Services reported 4.6% growth, Information and Communication rose 3.6%, Construction grew 2.7%, Financial and Insurance activities increased 2.4%, and Manufacturing rose 1%.
Additionally, Bahrain attracted higher foreign investment in Q2. Foreign direct investment stock increased 5.4% year-on-year, reaching BHD 17.5 billion. Analysts say this rise signals growing confidence in Bahrain’s business environment and its investment-friendly policies.
The Kingdom’s performance also reflects positively in global rankings. Bahrain led Arab nations in the Law and Order Index, with 90% of residents feeling safe at night. This ranking placed the country among the ten safest nations worldwide, emphasizing social stability as a factor in economic confidence.
Moreover, Bahrain improved ten positions in the 2025 Global Innovation Index by the World Intellectual Property Organization. The country ranked fifth globally in the Greenfield Foreign Direct Investment Performance Index and fifth in the Finance Skills Indicator according to the IMD World Talent Ranking 2025.
Government officials emphasized that these results confirm the effectiveness of Bahrain’s long-term economic strategies. By focusing on innovation, skills development, and investment facilitation, the Kingdom aims to sustain growth while diversifying revenue sources.
Looking ahead, experts predict that Bahrain’s non-oil sectors will continue to drive GDP expansion. Ongoing reforms, infrastructure projects, and international partnerships are expected to enhance the business environment further.
Bahrain’s Q2 performance underscores the economic growth of Bahrain through non-oil sector expansion, rising foreign investment, and improved global competitiveness. The Kingdom remains on track to strengthen its diversified economy and maintain sustainable development.
