Central Banker Report Cards 2025: Middle East
While central banks prepare for 2026 inflation, a consensus on tackling it remains elusive. Global Finance reveals the 2025 Central Banker Report Cards in the Middle East.
Bahrain's Economy
Bahrain, the smallest economy in the Gulf Cooperation Council (GCC), remains stable. GDP growth is expected to remain at 3.5% this year, with inflation expected to stay below 1%. The dirham is pegged to the dollar, and the Central Bank of Bahrain's (CBB) monetary policy aligns with that of the Fed.
- GDP growth: 3.5% expected this year
- Inflation: expected to remain below 1%
- Dirham pegged to the dollar
Bahrain could face tighter financial conditions from trade-related inflationary pressures and disrupted global supply chains
as noted by the World Bank in its latest statement. Bahrain was among the first Middle Eastern countries to diversify its economy away from oil rents decades ago.
Author's summary: Central banks in the Middle East face challenges in tackling inflation.