Bahrain non-oil GDP grows 2.2% despite regional maritime disruptions

Bahrain’s non-oil sector grew 2.2% in the first quarter of 2026 despite a sharp contraction in total GDP caused by regional security tensions and maritime restrictions. Data released on Thursday, 27 August, by the Ministry of Finance and National Economy shows that non-oil activities now account for 90.1% of the kingdom's real GDP. Oil sector hit by regional aggression Total GDP at constant prices contracted by 3.8% year-on-year in Q1 2026. The downturn was primarily driven by a 37.2% collapse in oil sector activities. According to the Bahrain Economic Quarterly Report, the decline resulted from "hostile Iranian aggression" and subsequent restrictions on maritime traffic through the Strait of Hormuz, which severely limited export capacity. Periodic maintenance schedules also contributed to the production drop. The report, carried by the Bahrain News Agency (BNA), noted that while the economy performed strongly in January and February, the impact of the regional security incident became evident in March 2026. At current prices, the overall GDP contracted by 2.7%, as a 31.1% drop in oil value offset a 1.9% rise in non-oil value. Financial services lead non-oil expansion Despite the disruption to energy exports, nine out of 13 non-oil economic sectors recorded positive growth. Financial and Insurance activities remained the dominant driver of the Bahraini economy, contributing 19.7% to GDP and growing by 8.6% year-on-year. Manufacturing followed as the second-largest non-oil…