Bahrain's economy grew by 2.1% in the third quarter of 2024, reaching 3.73 billion Bahraini dinars (approximately $9.91 billion USD). This growth was primarily driven by an annual expansion in non-oil activities, which saw a growth rate of 3.9%. However, according to the latest data from the Ministry of Finance and National Economy, Bahrain's oil sector experienced a decline of 8.1%.
The Bahraini economy is projected to grow by 2.7% in 2024, with the main impetus for this growth coming from diversified non-oil activities, which are expected to expand by 3.4% in 2024. Looking ahead to 2025, the real GDP growth rate could accelerate to 3.4% as the Bapco modernization project becomes operational. Meanwhile, non-oil activities are projected to experience stronger expansion in 2025, with a growth rate of 4.4%.
The non-oil sector has played a crucial role in supporting Bahrain's economic growth. In the third quarter of 2024, non-oil activities contributed 86.4% to the real GDP, with a total value of 3.22 billion Bahraini dinars. Among these, financial and insurance activities remained the largest contributors to the economy, accounting for 17.7%, followed by manufacturing at 16%, and public administration at 9.1%. The construction industry contributed 6.5%, and the transportation and storage sector contributed 4.6%. Simultaneously, Bahrain’s real estate, as well as wholesale and retail trade sectors, had similar contributions to the economy, at 4.1% and 4% respectively.
Additionally, the information and communication sector achieved the highest growth rate among non-oil activities, at 11.9%. The total number of mobile subscribers increased from approximately 2.3 million in the third quarter of 2023 to about 2.5 million in the third quarter of 2024, representing an annual growth rate of 6.5%. Bahrain's economic growth aligns with regional growth levels. According to the International Monetary Fund's Regional Economic Outlook, the economic growth of the Gulf Cooperation Council (GCC) is projected to accelerate from an estimated 1.8% in 2024 to 4.2% in 2025, primarily due to the easing of OPEC+ production cuts and continued strong growth in the non-oil sector. The non-oil sector's growth rate is expected to reach 4% in 2025, up from approximately 3.7% in 2024.
In the third quarter of 2024, oil activities contributed 13.7% to Bahrain's economy, with the sector experiencing an annual decline of 8.1% to 509.5 million Bahraini dinars. The Ministry of Finance attributed this significant decline to maintenance activities at the Abu Safa oil field. The average daily production from the offshore Abu Safa field decreased by 11.5% to 124,556 barrels per day during the quarter. Furthermore, production from the onshore Bahrain field decreased by 2% to approximately 38,026 barrels per day. In nominal terms, oil activities declined by 14%, largely due to lower global oil prices. The average price of Brent crude oil was $79.8 per barrel in the third quarter of 2024, a 7.9% decrease from the average price of $86.7 per barrel in the third quarter of 2023.
Investment inflows into Bahrain's economy continued to increase in the third quarter of 2024, growing by 3.5% to reach 16.5 billion Bahraini dinars, up from 15.9 billion Bahraini dinars in the third quarter of 2023. Financial and insurance services continued to attract the most foreign direct investment (FDI), accounting for 67.3%, or 11.1 billion Bahraini dinars. In terms of investment origin, Kuwait topped the list with 5.8 billion Bahraini dinars, representing 35% of the total foreign direct investment in Bahrain's economy. Saudi Arabia followed closely with an investment of 3.6 billion Bahraini dinars, accounting for 21.9%, and the UAE ranked third with an investment of 1.8 billion Bahraini dinars.