July 20, 2016
led by oil sector YOY growth of 12.1%
– Non-oil sector displays continuity
Bahrain experienced a pronounced pick-up in its headline growth during the first quarter of the year. Growth reached 4.5%, its highest level since 2014, led by the 12.1% year-on-year growth in the oil sector, according to the latest Bahrain Economic Quarterly (BEQ) issued by the Economic Development Board (EDB).
The report also noted resilience of the non-oil economy, where it continued to grow and benefit from a large pipeline of infrastructure investment. Nearly USD4bn of projects have now been tendered under the GCC Development Fund, with nearly USD3bn of projects already commenced. This marks a near tripling from a year earlier. Also private sector projects are making good progress, including flagship ventures such as Alba Line 6.
While growth continued to be broad-based across the non-oil economy, performance was particularly strong in social and personal services with 8.4% year-on-year gain. This reflects the strong demographics drivers underpinning the demand for private education and healthcare. Construction which rose by 5.4% year-on-year, reflects the strong infrastructure investment, while financial services expanded by 3.1% year-on-year.
This resilience momentum in the non-oil sector has helped to support strong growth in private sector employment. Overall employment saw an almost 7% year-on-year increase in Q1, with the private sector creating 46,669 jobs as compared to Q1 2015, a 9% year-on-year gain. According to the Social Insurance Organisation, Bahraini private sector employment stood at 92,567 in Q1 2016 as compared to 91,233 in 2015.
Mr. Khalid Al Rumaihi, Chief Executive of the EDB, commented on the findings of the BEQ report: “We are very encouraged by the resilience of the Bahraini economy in the face of a challenging global economy. This reflects the strengths of the fundamental factors underpinning long term growth in the region, the positive impact of the strategic infrastructure investment programme and Bahrain’s unique position as a location from which businesses can access the opportunities in the GCC”.
“There are very significant challenges for all GCC governments in adjusting to a lower oil price environment. These challenges are prompting countries across the region to make strategic commitments to economic diversification – something which we are confident will help us maintain momentum in the future”.