December 30, 2013
MANAMA: Bahrain’s headline gross domestic product (GDP) growth for the year is expected at close to five per cent, according to latest quarterly assessment by the Economic Development Board (EDB).
The EDB’s latest Bahrain Economic Quarterly said robust expansion of the Bahraini economy gathered further momentum this year.
The expansion has been above all driven by substantial gains in the oil and gas sector where output levels rebounded to capacity after technical disruptions.
At the same time, key drivers in the non-oil sector are strengthening and will make an increased contribution to the continued expansion of Bahrain’s economy next year.
The report notes that growth in the second half of the year has benefitted from an improvement in the global economic situation leading to cautious optimism about the wider outlook.
Renewed momentum in key emerging markets is creating opportunities for Bahraini trade while the strengthening performance of the regional economies has also contributed.
The adoption of the budget halfway through the year has lent a significant stimulus to economic activity, and the annual pace of non-oil growth picked up markedly from 2.5pc in the second quarter of the year to 3pc in the third quarter.
“Bahrain’s economy continued to outpace average global growth this year thanks to the solid economic fundamentals,” Transportation Minister and EDB acting chief executive Kamal bin Ahmed said.
“The anticipated greater contribution from the non-oil sector next year reflects the continued focus on diversifying the kingdom’s economy, and the investment in key infrastructure projects will also strengthen Bahrain’s position as the gateway to the $1.5 trillion Gulf market.”
Overall growth is set to stabilise to around 4pc next year, but the contribution of the non-oil sector is set to increase significantly due to the prospect of a large increase in project spending.
A number of significant undertakings, whether funded locally or from the GCC Development Fund, are either starting or about to be launched.
This move should in turn have significant positive implications for activity in a number of other sectors, for business and consumer confidence, and for bank credit growth.
Some important longer-term projects for the oil and gas sector are also moving forward including consultancy work for the planned offshore LNG import terminal, which is expected to be operational in 2016; the modernisation and expansion of the Sitra refinery is due to be completed in 2017; capacity of the oil pipeline from Saudi Arabia is being expanded by more than 50pc; and exploratory deep gas wells are due to be drilled next year.
The labour market continues to see a gradual improvement with total private sector employment growth in the second quarter of 6.2pc, the report said.
This is in large part reflective of the rebound in a number of labour-intensive sectors, such as hotels and restaurants as well as construction.