Central Banker Report Cards 2025: Middle East
As central banks prepare for 2026 inflation, consensus on tackling it remains elusive. Global Finance presents the 2025 Central Banker Report Cards in the Middle East.
Bahrain's Economic Stability
Bahrain, the smallest economy in the Gulf Cooperation Council (GCC), remains stable, with expected GDP growth of 3.5% this year and inflation below 1%. The dirham is pegged to the dollar, and the Central Bank of Bahrain's (CBB) monetary policy aligns with the Fed's.
- GDP growth: 3.5% expected this year
- Inflation: below 1% expected
- Dirham pegged to the dollar
Bahrain could face tighter financial conditions from trade-related inflationary pressures and disrupted global supply chains.
The World Bank noted this in its latest statement, following the CBB's cut of the overnight deposit rate by 25 bps to 4.75% after the Fed's cut in September.
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.