Bahrain EDB bids to win investors despite mounting headwinds

Bahrain’s Economic Development Board (EDB) is intensifying investor outreach even as mounting economic and geopolitical headwinds complicate its pitch. H.E. Noor bint Ali Alkhulaif, CEO of the EDB, completed a five-day visit to the U.K. aimed at deepening ties and attracting investment, following a recent five-day trip to China and Hong Kong. China is now Bahrain’s third-largest trading partner, with bilateral trade reaching $2.43 billion in 2025. The kingdom itself has a nominal GDP of $48.85 billion and is contending with the highest debt burden among Gulf states.

“You will hopefully see a very clear plan starting to emerge once the FTA is officially signed, but we’re laying the groundwork now to make sure that we’re ready for it,” H.E. Noor said, referring to the U.K.–GCC free trade agreement concluded in May and the opportunities it could unlock. The U.K.’s trade with the GCC currently totals £53 billion ($71 billion) and could rise by nearly 19.8% annually as a result of the agreement.

EDB priorities cited by H.E. Noor include manufacturing, energy, life sciences and healthcare, alongside a push into AI and cloud computing. International cloud providers Amazon Web Services (AWS) and Oracle are reported to be evaluating expansions in Bahrain as authorities seek to position the country as a regional data-hosting hub. The conversation around cloud expansion has shifted from digital sovereignty to digital resilience after drone attacks earlier this year disrupted AWS data centres in the UAE and Bahrain.

• Target sectors: manufacturing, energy, life sciences, healthcare, AI and cloud.
• Key partners: AWS, Oracle; recent diplomatic and trade outreach to China, Hong Kong and the U.K.
• Trade figure: bilateral trade with China reached $2.43 billion in 2025.
• Macroeconomic stress: foreign exchange reserves fell 56% to $1.5 billion at end-May; nominal GDP $48.85 billion.

On reserves and backstops, H.E. Noor acknowledged the sharp decline in foreign exchange holdings: “You saw the news, they did dip,” she said, noting that Bahrain has not tapped a $5.4 billion currency swap line extended by the UAE in April. “The Emiratis wanted to support us, not because of an immediate need, but as an added assurance for the local market, the banks, and potential investors. It’s a good buffer to have.” Bahrain remains the only GCC state without an investment-grade rating from the three major credit agencies, reflecting high public debt and large fiscal deficits.

External developments further complicate the EDB’s investor proposition. The IMF now expects MENA economies to contract by 0.5% in 2026 amid disruptions tied to the Iran war. “The contraction we are projecting for this year, as well as the downward revisions relative to April, reflect longer disruptions in oil, gas and refining production, as well as non-oil activity such as logistics, transport and tourism,” said Denise Egan, head of research at the IMF. Renewed Iranian attacks and military friction across the Gulf have also hit sectors such as manufacturing, logistics and tourism, H.E. Noor conceded.

Looking ahead, Bahrain’s strategy hinges on converting recent trade and diplomatic engagements into concrete investment commitments and on demonstrating resilience to geopolitical shocks. The EDB is preparing to capitalise on the U.K.–GCC FTA while courting cloud and AI players, even as policymakers weigh the implications of depleted reserves and continuing regional instability on investor confidence.