Stock Manama Bahrain skyline
The financial services sector has emerged as a key driver of Bahrain's economy Image Credit: Shutterstock

Dubai: Bahrain achieves a record-breaking milestone by securing $6.8 billion (Dh25 billion) in foreign direct investment (FDI) in 2023, marking a substantial 148 per cent surge from the $2.8 billion (Dh10.2 billion) recorded in the previous year, according to the latest World Investment Report by the UN Conference on Trade and Development.

The substantial increase propelled the nation's total inward FDI to $43.1 billion (Dh158 billion), up from $36.2 billion (Dh133 billion) in 2022. Bahrain's FDI to gross domestic product (GDP) ratio soared to 99.7 per cent, outpacing the global average of 46.9 per cent.

Noor bint Ali Al Khulaif, the Minister of Sustainable Development and CEO of Bahrain's Economic Development Board (EDB), told the Bahrain News Agency that the FDI figures for 2023 are a testament to Bahrain's strong value proposition for investors seeking competitive operating costs and strategic access to regional and international markets.

FDI stocks, which are crucial for gauging economic health, reflect the sum of direct investments that foreign entities have made and maintained within a country by the end of a given year. Expressed as a percentage of the GDP or gross domestic product and denominated in US dollars, these stocks offer a perspective on the magnitude of foreign investment in relation to the economy's overall size.

Despite being the smallest economy in the Gulf Cooperation Council (GCC), Bahrain has shown economic resilience, with an estimated GDP of $47 billion (Dh172.6 billion) for the current year. Gross domestic product (GDP), often functions as a comprehensive scorecard of a country’s economic health.

The financial services sector has emerged as a key driver of Bahrain's economy, outperforming the oil sector and contributing 17.8 per cent to the real GDP in 2023.

As part of its proactive strategy to diversify the economy, Bahrain has implemented initiatives such as the golden licence programme. This programme played a pivotal role in 2023 by attracting $2.4 billion (Dh8.8 billion) through nine major projects, which are anticipated to generate 3,000 job opportunities.