Finance is No. 2 contributor to economy for Islamic banking pioneer Bahrain

Source: OBG.

The energy sector remains the biggest contributor to Bahrain's GDP, although its contribution to the economy has been falling, says the Oxford Business Group (OBG).

The kingdom’s financial sector represents the second-largest contributor to GDP, accounting for 16.5% in 2014, says the OBG. Bahrain is a recognised pioneer in Islamic finance; it was the first country in the world to introduce and implement rules specific to Islamic banking in 2001.

Manufacturing is the third-largest GDP contributor, accounting for 14.4% of the total in 2014. The kingdom is home to one of the world’s largest aluminium smelters.

Infrastructure upgrades are expected to enhance the kingdom’s logistics offerings and boost tourism.

The Report: Bahrain 2016 includes a chapter on Islamic financial services, and names Bahrain as home to "some of the most important standard-setting institutions in the global shari'ah-compliant arena", including the Central Bank of Bahrain (CBB). According to the OBG, takaful markets in particular have experienced rapid growth, with takaful firms accounting for around 22% of gross written premiums in 2012, up from 3% in 2001. The OBG also noted that in March 2015, the CBB issued its first one-week Islamic deposit facility based on a wakalah agent contract, by which the regulator invests cash on behalf of the lender.

This chapter contains interviews with Shaikha Hessa bint Khalifa Al Khalifa, Chairperson, Al Salam Bank-Bahrain; and Hassan Jarrar, CEO, Bahrain Islamic Bank.
 

Interested?

Buy the report. The digital version is cheaper than the print edition, but buying the printed edition also includes PDF downloads of the report and access to report articles online. Chapters may be purchased.

Explore previous annual reports on Bahrain