The two-year 2025-26 budget plans BD8.9bn spending against BD6.4bn revenue, a ~BD2.5bn deficit, with interest close to a quarter of spending. The 2026 Iran conflict and Hormuz disruption pushed Moody's outlook to negative, while the government pursues fiscal reforms including higher fuel, power and water tariffs.
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Government · leader
King Hamad bin Isa Al Khalifa (head of state) / Crown Prince and Prime Minister Salman bin Hamad Al Khalifa
Key national agenda
- Fiscal balance and debt management (tariff reforms)
- Infrastructure: King Faisal Highway, Salman Industrial City expansion
- Digital government performance (Sijilat, Tawasul, Benayat)
- Better education and vocational training outcomes
- Security and economic stability amid regional conflict
Government programmes
2025-2026 state budgetBD8.9bn over two years
2026: revenue BD3.46bn, spending BD4.54bn, deficit BD1.08bn, interest BD1.16bn; infrastructure ~BD275m a year (Works BD60m, housing BD81m)
King Faisal Highway developmentNot disclosed
Financed under framework and agency agreements with the Islamic Development Bank; Cabinet approval May 2026 (amount not disclosed)
Salman Industrial City expansionNot disclosed
Financed under a separate agreement; Cabinet approval May 2026 (amount not disclosed)
Busaiteen Link Road package 4 (signature bridge)~US$277m (lowest bid)
Haji Hassan Group lowest bid ~US$277m, award pending (single source, as of Nov 2025)
Bahrain Metro, second Saudi causeway, Qatar causeway~US$3.5bn / ~US$4bn (estimate)
Long-term transport plans: second Saudi causeway ~US$3.5bn, Qatar-Bahrain causeway ~US$4bn (single source, estimates)
Business opportunities
Industrial-zone expansion design and smart estate solutions
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Highway ITS and traffic management
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E-government performance analytics and upgrades
The Cabinet regularly reviews Sijilat, Tawasul and Benayat performance.
Information & eGovernment Authority
Supplying state energy and utility firms
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Korean support schemes
- 2026 buyKOREA Specialized Trading Company Pavilion (call for participants) · KOTRA — Connects small and first-time exporters to overseas buyers via buyKOREA listings and SNS ads; free, about 100 firms, applications 3-13 Nov 2026 (target countries not named).
Official notices
- 2026-08-24 Cabinet approves GCC-Pakistan FTA and a package of priority development bills
- 2026-07-27 Cabinet approves Q1 2026 economic report and 2025 Future Generations Reserve Fund accounts
- 2026-06-08 Cabinet approves UK customs cooperation agreement and condemns Iranian attacks
- 2026-05-18 Cabinet approves financing for King Faisal Highway (IsDB) and Salman Industrial City expansion
Disaster · conflict · epidemic
Watch 2026-11-07
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Marshall Islands-flagged tanker bound for Bahrain hit by a suspected missile, one seafarer killed, ship taken to Bahrain (5 Nov) (single source) · Regional tension from the Iran war continues; further US–Israeli strikes under discussion
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Earth & space
Credit rating · FX
S&P B (stable, cut Nov 2025) / Moody's B2 (negative, Apr 2026) / Fitch B (stable, cut Feb 2026) · K-SURE Unverified · BHD
Sanctions
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No country-wide UN, US, EU, UK or Korean sanctions programme applies to Bahrain.
Sources
- Prime Minister's Office - Weekly cabinet meeting 2026-08-24
- Daily Tribune - BD8.9bn spending, BD2.5bn deficit in 2025-2026 budget
- GDN - Financing approved for key infrastructure deals
- Daily Tribune - July brings BD103m in contract awards
- The National - Moody's changes Bahrain outlook to negative
- ARY News - Fitch downgrades Bahrain to B
