Non-oil sector boosts Bahrain growth

29/05/2017 11:18 AST

Bahrain's non-oil sector's growth of 3.7 per cent helped to fuel overall economic growth of the kingdom, which expanded by 3 per cent in 2016, according to new figures published in the Economic Development Board (EDB).

This growth marks an acceleration over the 2.9 per cent recorded in 2015 and came in spite of significant regional and global headwinds, said the EDB’s Economic Quarterly.

The non-oil growth (up from 3.6 per cent in 2015) was driven by a number of sectors, with particularly strong performances in finance (one of the largest non-oil sectors, which grew 5.2 per cent during the year), construction (which grew 5.7 per cent) and social and personal services (which grew 9.1 per cent).

This momentum in the non-oil sector was supported by the implementation of unprecedented levels of infrastructure investment. In particular, the GCC Development Fund has seen the volume of active projects double from $1.6 billion in Q1 2016 to $3.2 billion in February 2017, the report said.

Bahrain has a priority programme of $32 billion of infrastructure projects which are expected to continue to act as counter-cyclical growth drivers. These projects include the $2.5-billion Alba Potline 6, an associated $800-million power station deal, the $1.1-billion airport expansion project and a new $355-million Banagas gas plant.

The impact of this investment underpins the expectation that non-oil growth will remain above 3 per cnet in 2017, despite ongoing regionwide fiscal consolidation, the report added.

Speaking on the publication of the report, Dr Jarmo Kotilaine, chief economic advisor to the EDB, commented: “2016 was an encouraging year for Bahrain’s economy. We continue to see resilience in the non-oil sector and this resilience helps to underpin the economic stability for businesses and investors in the kingdom.

“This is important because the economic transformation taking place in the region is creating exciting opportunities for businesses in the Gulf the coming years. We know that it is vital not just to maintain economic stability but also to continue to pursue the structural, legal and regulatory reforms that will make it easier for companies to access those opportunities,” he said.

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