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Bahrain seeks Gulf aid amid Iran tensions

Bahrain seeks Gulf aid amid Iran tensions

Sources familiar with the matter expect Bahrain to receive financial support from the Gulf Cooperation Council, particularly from the UAE, to help it confront its mounting debt crisis caused by the war in Iran and the significant decline in foreign exchange reserves, which have fallen by over 50% since March. Bahrain's economy, with a debt-to-GDP ratio estimated at 152.4%, has been hurt by rising interest rates and a slowdown in economic activity, despite some international bonds temporarily recovering. The timing and amount of Gulf support are expected to be decided soon; such aid is crucial to prevent financial challenges from worsening and to maintain debt sustainability, amidst forecasts of a sharp economic contraction in 2026.

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