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Nestled in the heart of the Arabian Gulf, Bahrain stands as a testament to adaptability and economic dynamism. Renowned for its strategic location, the nation has strategically diversified its economy, with a focus on sectors like finance, tourism, and energy. Bahrain’s commitment to innovation and business-friendly policies positions it as a regional hub for investment and growth. Delve into the economic fabric of Bahrain, revealing the nation’s resilience and diversification strategies amid global challenges through a spotlight on its key industries. From the thriving financial sector to the dynamic energy landscape, this article unravels the layers of Bahrain’s economic narrative.
Major Industries in Bahrain
Real Estate Industry
The real estate sector in Bahrain stands as a thriving and continually expanding industry, luring investors with lucrative opportunities. Government development strategies have contributed to the growth of districts, offering diverse living options. Bahrain’s real estate offerings range from hotel apartments supporting tourism to upscale buildings and rustic huts, reflecting a strategic approach to boost the nation’s resources. Recognized by the International Trade Administration for global opportunities, Bahrain positions itself as an attractive investment destination, evident in areas like the Diplomatic Area in Manama. Despite global challenges, Bahrain’s real estate sector demonstrated resilience, with a mere 0.9% contraction in 2020, underscoring its robust nature.
Food and Drink Industry
The Bahrain service market is categorized based on food service type (Cafes and bars, Cloud Kitchen, Full Service Restaurants, Quick Service Restaurants), Outlet (Chained Outlets, Independent Outlets), and Location (Leisure, Lodging, Retail, Standalone, Travel), with market values presented in USD. Noteworthy data includes outlet numbers for each food service channel and average order values in USD. The food and drink industry significantly contributes to Bahrain’s economy, exhibiting resilience to inflation and crises like the COVID-19 pandemic. In 2020, the total value of the food and drink business reached an estimated $14 million.
Chemical Industry
The chemicals sector, a globally sought-after industry, has played a pivotal role in Bahrain’s economic landscape. In 2014, the American Chemistry Council reported annual revenues of 5.4 trillion, emphasizing Bahrain’s strategic shift from a petroleum-based economy to a diversified one. The nation has made significant strides in infrastructure development and forged connections within the industry. With over 10,000 chemical companies and 784,000 employees in Bahrain, the sector showcases resilience in navigating unforeseen challenges, underscoring its stability and importance to the country’s economic fabric.
Manufacturing Industry
Bahrain’s economy has strategically responded to the challenges posed by the plummeting oil prices, particularly amid the pandemic, by bolstering its manufacturing sector. The nation has taken initiatives to establish numerous factories, aiming to amplify export volumes. Presently holding approximately 16.8% of the global manufacturing share, Bahrain’s contribution surpasses that of many other Gulf countries. The government has set ambitious targets, expressing its commitment to reducing the share to 18% by 2024. This concerted effort underscores Bahrain’s resilience and diversification strategies, positioning manufacturing as a pivotal player in its economic stability and growth.
Oil and Gas
Bahrain, endowed with a modest reserve of 124 million barrels of oil, is actively seeking to boost mining investments to enhance productivity in this sector. Despite facing setbacks due to the pandemic’s impact, national companies received significant funding, around $570 million, to fuel the industry and increase daily oil production to 250,000 barrels. The kingdom has outlined a future strategy to double this output to 360,000 barrels, with major investments from Saudi oil giant Aramco. Although Bahrain’s largest oilfield, Abu Safa, is operated by Saudi Arabia, contributing 50% of profits to Bahrain, the oil industry remains a dominant force, constituting 11% of GDP and 80%-90% of government revenues.