May 7, 2020 | Policy Brief

COVID-19 in Bahrain

May 7, 2020 | Policy Brief

COVID-19 in Bahrain

As low oil prices and the pandemic strain Bahrain’s state budget, Manama may seek economic assistance from its Gulf neighbors. Less certain, however, is whether those neighbors will come to the island nation’s rescue.

Situation Overview

Bahrain registered its first case in late February, a Bahraini citizen returning from Iran, the regional epicenter of the COVID-19 pandemic. As the global crisis expanded, Bahrain launched a program on March 11 to repatriate citizens from Iran and other countries affected by COVID-19.

As of May 7, Bahrain’s Ministry of Health has reported 4,131 confirmed cases and eight fatalities. The country’s caseload has grown exponentially since mid-April, and the daily number of new cases continues to grow. Like Qatar, Bahrain is attributing most of the new infections to expatriate workers.

COVID-19 in the Greater Middle East

Country Cases Deaths
Turkey 131,744 3,584
Iran 103,135 6,486
Saudi Arabia 33,731 219
Pakistan 24,122 585
Qatar 18,890 12
Israel 16,346 239
UAE 16,240 165
Egypt 7,588 469
Kuwait 6,567 44
Morocco 5,505 183
Algeria 4,997 476
Bahrain 4,131 8
Afghanistan 3,563 106
Oman 2,958 14
Iraq 2,480 102
Tunisia 1,025 43
Sudan 930 52
Somalia 873 39
Lebanon 784 25
Jordan 484 9
W. Bank & Gaza 374 2
Libya 64 3
Syria 45 3
Yemen 21 5

Source: JHU Coronavirus Resource Center
Data current as of 12:15 PM, May 7, 2020.


Already one of the Gulf’s most vulnerable economies, Bahrain’s woes have deepened amid the COVID-19 crisis. The country is heavily reliant on revenue from hydrocarbon exports, but these funds have dried up following the collapse in oil prices triggered by the COVID-19 crisis and the  Russian-Saudi price war. Initially projected to grow by 2.1 percent this year, Bahrain’s economy is now expected to contract by 3.6 percent.

Bahrain has pumped out fiscal stimulus to help its citizens and private sector withstand the crisis. In March, Manama announced an $11.4 billion relief package, equivalent to almost 30 percent of Bahrain’s GDP. The package includes $570 million for private sector wages, funds for water and electricity bills, and exemptions from certain fees for individuals and businesses.

With crude prices far below Bahrain’s budget break-even point of roughly $96 per barrel, the International Monetary Fund projects that Bahrain’s fiscal deficit will jump to 15.7 percent of GDP in 2020. The government has taken some measures to curb spending, including reducing ministries’ administrative budgets by 30 percent and delaying infrastructure developments. Manama also intends to issue international bonds twice this year, which could buy it some breathing room.

Still, the country’s debt-to-GDP ratio is expected to reach over 100 percent this year. Meanwhile, a dwindling supply of foreign reserves may leave Bahrain unable to defend its currency peg.

What to Watch for

Just two years ago, Bahrain turned to Saudi Arabia, Kuwait, and the United Arab Emirates for a five-year, $10 billion bailout package, which came on the heels of another $10 billion Gulf bailout in 2016. Facing an even worse situation now, the island kingdom may again need to ask its wealthier Gulf neighbors for even more assistance. But as they grapple with their own fiscal and economic troubles, Bahrain’s Gulf neighbors may balk at the prospect of bailing it out for a third time. Still, there is the possibility that Gulf allies may be willing to extend smaller, more incremental amounts of aid to Bahrain, particularly given Manama’s willingness to tap debt markets.

Varsha Koduvayur is a senior research analyst focusing on the Gulf at the Foundation for Defense of Democracies (FDD), where she also contributes to FDD’s Center on Economic and Financial Power (CEFP). For more analysis from Varsha and CEFP, please subscribe HERE. Follow Varsha on Twitter @varshakoduvayur. Follow FDD on Twitter  @FDD and @FDD_CEFP. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.


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