May 28, 2017
- Resilience of non-oil sector means economy expands 3% for 2016 calendar year –
– Implementation of $32bn project pipeline provides additional momentum –
Growth of 3.7% in the non-oil sector helped to fuel overall economic growth of 3% in Bahrain in 2016, according to the latest figures published in the Economic Development Board’s Bahrain Economic Quarterly. This growth marks an acceleration over the 2.9% pace recorded in 2015 and came in spite of significant regional and global headwinds.
The non-oil growth (up from 3.6% 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% during the year), construction (which grew 5.7%) and social and personal services (which grew 9.1%).
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 USD1.6bn in 1Q16 to USD3.2bn in February 2017.
Bahrain has a priority programme of $32bn of infrastructure projects which are expected to continue to act as counter-cyclical growth drivers. These projects include the USD2.5bn ALBA Pot Line 6, an associated USD800mn power station deal, the USD1.1bn airport expansion project and a new USD355mn Banagas gas plant.
This impact of this investment underpins the expectation that non-oil growth will remain above 3% in 2017, despite ongoing regionwide fiscal consolidation.
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.”