As elsewhere in the world, the COVID-19 pandemic continued to have a profound effect on all aspects of life in Bahrain throughout 2021. While the Kingdom was widely recognized for its coordinated response to COVID-19 and implemented a range of successful public health mitigation strategies – including fully vaccinating over 70 per cent of the eligible population – the economic recovery was undermined by the emergence of a new variant of the virus and another wave of cases towards the end of the year. Nevertheless, Bahrain remained well placed to respond to the latest variant, imposing tighter restrictions into the new year to contain the spread. At the same time, government economic stimulus and support measures are likely to continue into 2022 as broader recovery plans are set in motion to support the economy.

After a 5.1 per cent decline in real GDP growth in 2020, the economy of Bahrain rebounded in 2021, experiencing an estimated 2.1 per cent growth based on the Economist Intelligence Unit data. The economy was expected to grow further to 3.2 per cent in 2022. Over the course of 2021, Bahrain continued to prioritize addressing its fiscal situation. Although the implementation of the Fiscal Balance Programme, launched in 2018 and designed to eliminate the fiscal deficit by 2022, was undermined by the COVID-19 pandemic, with the deadline to reach fiscal balance being pushed to 2024, the deficit was expected to continue narrowing owing, in part, to higher oil prices and other cost rationalization measures, including raising the value added tax to 10 per cent, a measure which was implemented on 1 January 2022.

As part of its long-standing focus on diversification, and in response to the pandemic, the Government announced the Industrial Sector Strategy 2022-2026, which encompassed renewed commitments to renewable energy and a circular carbon economy as well as the creation of five new cities on reclaimed land.

With a census carried out in the second quarter of 2020, the socioeconomic demographic profile of the country became clearer. The population, which international projections had put at 1.7 million, was in fact recorded as 1.5 million. This was partially due to the job losses linked to the pandemic and the subsequent departure of migrant workers.

SDG trends showed slippage in the overall ranking of the country on the SDG Index from 82 out of 166 countries in 2020 to 100 out of 165 in 2021, indicating room for improvement in several areas, in particular with respect to the goals related to the environment, including SDG 11, for which a downward trend was observed. At the same time, Bahrain ranked high on the Human Development Index, with the latest available data from 2019 placing the country at 42 out of 189.

Key Facts

Note: Economic statistics are 2021 estimates, population and labour force statistics are for 2020, human development and education statistics are for 2019, and health statistics are for 2018/2019. Data sources: Information and eGovernment Authority, Ministry of Health, Economist Intelligence Unit, World Bank and other United Nations entities.

While the broader regional political situation was marked by major events, such as the United States’ withdrawal from Afghanistan, 2021 signalled a relative easing of tensions in the Gulf. The Abraham Accords, which marked the normalization of relations with Israel in 2020, continued to inform strengthening regional ties, marked by several high-level visits.

Bahrain continued to strengthen international cooperation throughout 2021. Joining countries from around the world, Bahrain announced during the Twenty-Sixth United Nations Climate Change Conference of the Parties in Glasgow its commitment to achieve net zero emissions by 2060 and cut emissions by 30 per cent by 2035. Bahrain also won the presidency of the Executive Committee of the Montreal Protocol on Substances that Deplete the Ozone Layer for 2022 and became a member of the UNESCO International Bureau of Education.