Bahrain economy achieves real growth of 2.4%

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Bahrain’s economy grew moderately in 2023, with real GDP expanding by 2.4 per cent year-on-year according to data released by the Information and eGovernment Authority (iGA).

This translates to a gross domestic product (GDP) of BD13,661.22 million ($36.7 billion) at constant prices for 2023, compared to BD13,341.97m ($35.7bn) in 2022.

Real GDP refers to the total value of goods and services produced in an economy, adjusted for inflation. It reflects the actual purchasing power of the GDP, meaning it shows the true growth of the economy in terms of the amount of goods and services produced.

GDP at constant prices emphasises that the value of goods and services is measured using the prices from a base year, not the current year’s prices.

This removes the distorting effect of inflation, allowing for a more accurate comparison of economic output across different years.

The report highlights the growing importance of non-oil sectors to Bahrain’s economic performance. Financial projects and manufacturing emerged as the top contributors to non-oil GDP, accounting for 17.8pc and 13.6pc respectively. Among these sectors, hotels and restaurants witnessed the strongest growth (8pc), followed by government services (6pc) and financial projects (5.7pc).

The final quarter of 2023 saw a slightly stronger growth rate of 3.45pc compared to the same period in 2022 (at constant prices). Non-oil activity continued to lead the charge, expanding by 4.03pc.

Notably, the fourth quarter also exhibited positive growth relative to the third quarter of 2023, with real GDP rising by 4.61pc. This growth was primarily driven by the non-oil sector, which grew by 5.14pc at constant prices.

These figures signal a positive trajectory for Bahrain’s economy, say analysts expecting the non-oil sector to maintain its growth momentum and further reduce dependence on hydrocarbon revenue.