Echoing the 2014 crisis with low oil prices and surging debt

C4

HIGH RISK

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

Updated in January 2025.

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Form of state Constitutional monarchy
Head of government Hamad bin Isa Al Khalifa 
Next elections 2026, legislative
Strengths
  • Bahrain’s economy is diversified within the GCC, with the hydrocarbon sector contributing only one-fifth to GDP
  • The country has received financial support from Gulf neighbors, such as Saudi Arabia, the UAE and Kuwait in recent crises
  • Bahrain maintains business-friendly regulatory and legal frameworks, supporting economic activities and attracting investments
Weaknesses
  • Hydrocarbons still account for around 75% of government receipts, making Bahrain vulnerable to fluctuations in oil prices
  • Bahrain faced multiple crises in recent years due to a significant drop in hard currency reserves and high fiscal and external breakeven oil prices
  • The country’s public debt has increased sharply, reaching 121% of GDP in 2023, with fiscal deficits and external debt posing medium-term sustainability concerns
(% of total, 2023)
(% of total, annual 2023)
The Allianz Trade Collection Complexity Score provides a simple assessment of how easy it is to collect debt around the world. The 2022 edition covers 49 countries that represent nearly 90% of global GDP and 85% of global trade.
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