BahrainChapters
Bahrain is an archipelago of 33 islands covering around 780 square kilometers, making it one of the smallest countries in Asia. Despite its size, Bahrain holds strategic importance in the Gulf region. Historically, Bahrain was known for its pearl diving industry, but today its wealth primarily stems from oil, natural gas, and an increasingly diversified economy.
Economically, Bahrain was the first Gulf country to discover oil, in 1932, and this discovery transformed its economy. However, unlike many of its neighbors, Bahrain has successfully diversified beyond oil. The country has developed a robust banking and financial sector, hosting more than 400 financial institutions, which has made Manama one of the key financial centers in the Middle East. Other important industries include aluminum production, tourism, manufacturing, and logistics. The government’s Economic Vision 2030 plan aims to promote sustainability, innovation, and private-sector growth, ensuring that Bahrain’s future economy remains resilient and knowledge-based.
The government has invested heavily in digital transformation, positioning the country as a regional hub for fintech, cloud computing, and renewable energy. Innovation and entrepreneurship are central to the nation’s strategy for sustainable growth.
Tourism plays an increasingly vital role in Bahrain’s economy. The country offers a mix of cultural heritage and modern attractions, such as the Bahrain Fort (Qal’at al-Bahrain), a UNESCO World Heritage Site, the Al Fateh Grand Mosque, the Bahrain National Museum, and the Formula 1 Bahrain International Circuit, which hosts the Bahrain Grand Prix each year. Modern developments like the Amwaj Islands and The Avenues Mall have made Bahrain a popular destination for regional tourism and leisure.
Key indicators
- Area
- 760 km2
- Population
- 1,566,888 (2024 est.)
- Government type
- constitutional monarchy
- Languages
- Arabic (official), English, Farsi, Urdu
- GDP
- $47.39 billion (2025 est.)
- Growth rate
- 3% (2024 est.)
- HDI
- 42
- Capital
- Manama
Macroeconomic indicators
IMF Statistics:
| Subject descriptor | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|
|
All Items, Consumer price index (CPI), Period average, percent change Percent (Units) |
3.635 |
0.075 |
0.920 |
-0.138 |
2.400 |
|
Current account balance (credit less debit), Percent of GDP Percent (Units) |
14.720 |
5.844 |
4.834 |
5.937 |
3.931 |
|
Current account balance (credit less debit), US dollar US dollar (Billions) |
6.839 |
2.699 |
2.282 |
2.822 |
1.920 |
|
Exports of goods and services, Volume, Free on board (FOB), Percent change Percent (Units) |
9.163 |
-9.061 |
1.895 |
6.187 |
-1.475 |
|
Gross domestic product (GDP), Constant prices, Percent change Percent (Units) |
6.180 |
3.878 |
2.897 |
3.109 |
-0.499 |
|
Gross domestic product (GDP), Current prices, Per capita, US dollar US dollar (Units) |
30470.504 |
29290.112 |
29716.447 |
29343.670 |
29569.160 |
|
Gross domestic product (GDP), Current prices, US dollar US dollar (Billions) |
46.458 |
46.192 |
47.210 |
47.538 |
48.849 |
|
Imports of goods and services, Volume, Cost insurance freight (CIF), Percent change Percent (Units) |
11.888 |
2.589 |
1.580 |
2.876 |
-1.984 |
|
Unemployment rate |
5.400 |
6.300 |
6.200 |
Estimates
Source: IMF Statistics - Bahrain
Relationships with Luxembourg
Existing conventions and agreements
Non double taxation agreement
In order to promote international economic and financial relations in the interest of the Grand Duchy of Luxembourg, the Luxembourg government negotiates bilateral agreements for the avoidance of double taxation and prevent fiscal evasion with respect to Taxes on Income and on fortune with third countries.
- Convention from 06.05.2009 (Memorial 2010, A, no. 51, p. 830)
- Effective as of 01.01.2011 (Memorial 2010, A, no.51, p.830)
Air Services agreement
- Agreement from 14.1.1994 (Memorial 1995, A, p.1592)
- Effective as of 09.11.1995 (Memorial 1996, A, p.1257)
Source: https://impotsdirects.public.lu/fr/conventions/luxembourg.html
Further information
Foreign Trade
The Statec Foreign Trade statistics provide information on the trade of goods - by product and by country. This information is collected respectively through the INTRASTAT declaration and on the basis of customs documents.
You can see the statistics on the website of the Statec.
Contact Points in Bahrain
Luxembourg Trade and Investment Office in Abu Dhabi
Mrs Marie-Anne Marx
Executive Director
Appt. 6201, 62nd Floor
Nation Tower Residences, Corniche Road
P.O. Box 44909
Abu Dhabi
Tel.: (+971) 2 207 9999
E-mail: ltio.abudhabi@mae.etat.lu
Source: Luxembourg Trade&Investment Office (LTIO)
Country risk as defined by Office du Ducroire for Bahrain
Ducroire is the only credit insurer covering open account deals in over 200 countries. A rating on a scale from 1 to 7 shows the intensity of the political risk. Category 1 comprises countries with the lowest political risk and category 7 countries with the highest. Macroeconomics experts also assess the repayment climate for all buyers in a country.
Link: www.odl.lu