Economy - overview:
Bahrain is one of the most diversified economies in the Arabian Gulf, with its highly developed communication and transport facilities making Bahrain home to numerous multinational firms with business in the Gulf. Bahrain and the US in August 2006 implemented a Free Trade Agreement (FTA), the first FTA between the US and a Gulf state, as part of its diversification plans. Bahrain, however, continues to depend on oil with petroleum production and refining accounting for over 60% of Bahrain's export receipts, over 70% of government revenues, and 11% of GDP (exclusive of allied industries). Other major segments of Bahrain's economy are aluminum--Bahrain's second major export after oil--financial, and construction sectors. Bahrain is focused on Islamic banking and is competing on an international scale with Malaysia as a worldwide banking center. Future economic growth hinges on Bahrain's ability to acquire new natural gas supplies as feedstock to support its expanding petrochemical and aluminum industries. Unemployment, especially among the young, is a long-term economic problem Bahrain continues its struggle to address. Bahrain in 2009 began plans to end its sponsorship system for expatriate workers and increase the costs of employing cheap foreign labor to help reduce Bahraini unemployment. The global financial crisis resulted in slower economic growth for Bahrain during 2009 as tight international credit and a slowing global economy caused funding for many non-oil projects to dry up. Lower oil prices may also cause Bahrain's budget to slip back into deficit for the first time since 2002 prompting Bahrain to issue an emergency budget supplement and finance its deficits with bonds.

GDP (purchasing power parity):
$28 billion (2009 est.)