Economy

In a region currently experiencing an unprecedented oil boom, Bahrain has the fastest growing economy in the Arab world, the United Nations Economic and Social Commission for Western Asia found in January 2006. According to the 2006 Index of Economic Freedom, Bahrain also has the freest economy in the Middle East and is twenty-fifth freest overall in the world.

In Bahrain, petroleum production and processing account for about 60% of export receipts, 60% of government revenues, and 30% of GDP. Economic conditions have fluctuated with the changing fortunes of oil since 1985, for example, during and following the Persian Gulf crisis of 1990-91. With its highly developed communication and transport facilities, Bahrain is home to numerous multinational firms with business in the Persian Gulf. A large share of exports consists of petroleum products made from imported crude. Construction proceeds on several major industrial projects. Unemployment, especially among the young, and the depletion of both oil and underground water resources are major long-term economic problems.

In 2004, Bahrain signed the US-Bahrain Free Trade Agreement, which reduces certain barriers to trade between the two nations.

Facts and Figures

• GDP:
  • Purchasing power parity: $18.02 billion
  • Official exchange rate: $12.14 billion
  • Real growth rate: 7.8%
  • Per capita (PPP): $25,800
  • Composition by sector:
    • Agriculture: 0.5%
    • Industry: 38.7%
    • Services: 60.8%
• Labour force:
  • Total: 352,000
  • By occupation:
    • Agriculture: 1%
    • Industry: 79%
    • Services: 20%
• Unemployment rate: 15%
• Inflation rate (consumer prices): 3.5%
• Investment (gross fixed): 21.1% of GDP
• Budget:
  • Revenues: $5.582 billion
  • Expenditures: $4.197 billion; including capital expenditures of $700 million
• Public debt: 34.2% of GDP
• Agriculture products:
  • Fruit
  • Vegetables
  • Poultry
  • Dairy products
  • Shrimp
  • Fish
• Industries:
  • Petroleum processing and refining
  • Aluminium smelting
  • Iron pelletization
  • Fertilizers
  • Offshore banking
  • Insurance
  • Ship repairing
  • Tourism
• Industrial production growth rate: 2%
• Electricity:
  • Production: 7.794 billion kWh
  • Consumption: 7.248 billion kWh
  • Exports: 0 kWh
  • Imports: 0 kWh
• Oil:
  • Production: 188,300 bbl/day
  • Consumption: 27,000 bbl/day
  • Proved reserves: 121 million bbl
• Natural gas:
  • Production: 9.75 billion cu m
  • Consumption: 9.75 billion cu m
  • Exports: 0 cu m
  • Imports: 0 cu m
  • Proved reserves: 92.03 billion cu m
• Current account balance: $1.999 billion
• Exports:
  • Total: $12.62 billion
  • Commodities:
    • Petroleum and petroleum products
    • Aluminium
    • Textiles
  • Partners:
    • Saudi Arabia 3.3%
    • US 2.6%
    • UAE 2.3%
• Imports:
  • Total: $9.036 billion
  • Commodities:
    • Crude oil
    • Machinery
    • Chemicals
  • Partners:
    • Saudi Arabia 36.5%
    • Japan 6.6%
    • Germany 6.4%
    • US 5.4%
    • UK 5%
    • UAE 4.1%
• Reserves of foreign exchange and gold: $2.918 billion
• Debt - external: $7.267 billion Economic aid - recipient:
• $150 million; note - $50 million annually since 1992 from the UAE and Kuwait
• Currency (code): Bahraini dinar (BHD)