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RIYADH: Bahrain’s real gross domestic product grew by 2.7 percent year on year in the first quarter of 2025, supported by a 2.2 percent increase in non-oil activities, according to official data.

The Ministry of Finance and National Economy revealed in its quarterly report for the first quarter of 2025, steady economic expansion was driven by robust non-oil sector performance and rising foreign investment.

Preliminary data from the Information and eGovernment Authority also showed a 5.3 percent rise in the oil sector. In nominal terms, GDP expanded by 3 percent, with non-oil and oil sectors growing by 2.8 percent and 4.6 percent, respectively. The non-oil division remained the dominant force, contributing 84.8 percent to real GDP.

Bahrain’s economic growth aligns with that of its Gulf Cooperation Council neighbors. In the first quarter, ������Ƶ’s economy grew by 3.4 percent year on year, driven by strong non-oil sector performance. This trend reflects the World Bank’s June projections, which forecast GCC-wide growth to reach 3.2 percent in 2025 and accelerate to 4.5 percent in 2026, following a modest 1.8 percent expansion in 2024.

“Bahrain has continued to make notable progress across several international economic and development benchmarks, reflecting the kingdom’s commitment to economic diversification, global standards, and enhancing its business environment through the adoption and implementation of a number of ambitious strategies and initiatives,” the ministry said in a press release.

The fastest-growing sector was accommodation and food services, which surged by 10.3 percent year on year, followed by financial and insurance activities, the largest GDP contributor, which grew by 7.5 percent. 

Other key sectors also saw positive growth, including construction at 5.4 percent, education at 2.5 percent, and professional and technical services at 2.2 percent. Meanwhile, wholesale and retail trade and real estate grew by 2 percent each, while manufacturing experienced a slight decline of 0.4 percent. 

Foreign direct investment stock also increased, rising by 3.5 percent year-on-year to reach 17.1 billion Bahraini dinars ($45.3 billion), signaling continued international confidence in Bahrain’s economy.

On the consumer price index, the report added: “The headline CPI remained relatively stable, recording a YoY increase of only 0.1 percent during the first quarter of 2025. The relative price stability reflects the government of Bahrain’s proactive efforts to mitigate global supply chain disruptions.”

The Central Bank of Bahrain recorded a 19.2 percent year-on-year growth in the monetary base, reaching 6.1 billion dinars, up from 5.1 billion dinars in the same quarter in 2024.

“This increase coincided with lower interest rates, which encouraged borrowing and investment, thereby supporting economic activity,” the report said.

SINGAPORE: Oil prices rose on Tuesday as the US and China extended a pause on higher tariffs, easing concerns that an escalation of their trade war would disrupt their economies and crimp fuel demand in the world’s two largest oil consumers.

Brent crude futures gained 14 cents, or 0.2 percent, to $66.77 a barrel by 09:43 a.m. Saudi time, while US West Texas Intermediate crude futures rose 8 cents, or 0.1 percent, to $64.04.

US President Donald Trump extended a tariff truce with China to Nov. 10, staving off triple-digit duties on Chinese goods as US retailers prepared for the critical end-of-year holiday season.

This raised hopes that an agreement could be attained between the world’s two largest economies and avert a virtual trade embargo between them. Tariffs risk slowing global growth, which could sap fuel demand and drag oil prices lower.

Oil’s gains have also been supported by fresh signs of softness in the US labour market, which have boosted expectations for a Federal Reserve rate cut in September, said Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova.

Also on the radar is US inflation data later in the day, that could shape the Fed’s rate path. Interest rate cuts typically boost economic activity and oil demand.

Potentially weighing on the oil market, Trump and Russian President Vladimir Putin are due to meet in Alaska on Friday to discuss an end to the war in Ukraine.

“The US-Russia diplomatic track on the Ukraine conflict remains a wildcard, with traders monitoring for any geopolitical surprises that could disrupt supply routes or sanction regimes,” Sachdeva said.

The meeting comes as the US steps up pressure on Russia, with the threat of harsher penalties on Russian oil buyers such as China and India if no peace deal is reached.

“Any peace deal between Russia and Ukraine would end the risk of disruption to Russian oil that has been hovering over the market,” ANZ senior commodity strategist Daniel Hynes wrote in a note.

Trump set a deadline of last Friday for Russia to agree to peace in Ukraine or have its oil buyers face secondary sanctions, while pressing India to reduce purchases of Russian oil.

Washington also wants Beijing to stop buying Russian oil, with Trump threatening to impose secondary tariffs on China.

The risk of those sanctions being enacted has receded ahead of the Aug. 15 Trump-Putin meeting.