Bahrain’s debt reaches $48bln, but expert minimizes concerns over spending cuts

Non-oil activity driving GDP growth

Bahrain’s public debt has reached nearly BHD18 billion ($48 billion), as reported by its Ministry of Finance. However, a banking expert has downplayed concerns regarding the country’s spending.

As the smallest nation in the GCC with a population of around 1.5 million, Bahrain faces dwindling oil and gas reserves and is partly dependent on the Abu Safah oil field it shares with Saudi Arabia. To balance its budget, Bahrain needs an oil price of approximately $125 per barrel.

In 2023, interest payments on the country’s debt amounted to BHD843 million, according to the finance ministry.

Manpreet Gill, Chief Investment Officer for Africa, the Middle East, and Europe at Standard Chartered, stated last week that he is not worried about Bahrain’s economic viability.

«Bahrain has historically had a much higher breakeven, so I don’t think anything has changed,» Gill said during a roundtable discussion. «I wouldn’t worry excessively about it.»

The country’s economy is expected to grow by 3.5% in 2025, driven by manufacturing and private sector credit expansion, according to the International Monetary Fund (IMF).

The medium-term forecast for real GDP growth stands at around 3%, with non-hydrocarbon GDP projected to make up nearly 90% of the economy by 2029. Inflation is expected to be around 2%.