Bahrain Experience 148% Increase in FDI Inflows

Bahrain has achieved a record $6.8 billion in foreign direct investment (FDI) inflows in 2023, according to the latest World Investment Report (WIR 2024) by the United Nations Conference of Trade and Development (UNCTAD). This figure represents a remarkable 148% increase from the $2.8 billion recorded in 2022, setting a new milestone for the island nation.

The surge in FDI has significantly contributed to the growth of cumulative inward FDI stocks, which climbed from $36.2 billion in 2022 to $43.1 billion in 2023. Bahrain’s FDI stocks relative to GDP stood at an impressive 99.7% as of the end of 2023, substantially higher than the global average of 46.9%. Key contributors to Bahrain’s diverse FDI portfolio include Kuwait (36%), Saudi Arabia (23%), and the UAE (10%), as reported by Bahrain’s Information & eGovernment Authority.

Noor bint Ali Alkhulaif, Minister of Sustainable Development and Chief Executive of the Bahrain Economic Development Board (Bahrain EDB), stated, “The milestone FDI inflows attracted in 2023 reflect the strength of Bahrain’s value proposition and its continued standing as a trusted destination for regional and global investors seeking best value operating costs in a strategic location that serves as an ideal gateway to the region and beyond.”

Bahrain has consistently positioned itself as an attractive investment hub, with the government prioritising the development of forward-looking regulatory frameworks and strategic economic plans to foster growth and diversification. The nation’s nominal GDP has grown from approximately $11 billion in 2003 to over $43 billion in 2023, marking an average annual growth rate of 7%, which surpasses the global average of 5%.

In addition to achieving robust economic growth, Bahrain has also diversified its economy. The financial services sector has overtaken the oil sector as the highest contributor to real GDP, accounting for 17.8% in 2023—a significant milestone.

Alkhulaif emphasised, “Supported by an agile government, a highly skilled bilingual talent pool, and a financially liberal environment, Bahrain has proven itself as a leading investment destination. At Bahrain EDB, we continue to work strategically to attract increased investments from priority markets, supported by Team Bahrain, to sustain economic growth and diversification.”

A pivotal initiative launched in April 2023, the Golden Licence has played a crucial role in attracting a total of $2.4 billion in investments from nine major projects, set to generate 3,000 job opportunities. Notable projects awarded a Golden Licence in 2024 include Bahrain Titanium, the first facility of its kind in the region by Interlink Metals & Chemicals; the first greenfield head office of the National Bank of Kuwait (NBK) outside of Kuwait; a data centre facility and international submarine cable by Beyon; and the development of Bahrain Marina.

Bahrain’s record FDI inflows and strategic initiatives show its growing attractiveness as a prime investment destination. The government’s commitment to economic reforms and strategic partnerships continues to pave the way for sustained growth in foreign direct investment.