October 29, 2015
According to the Q2 Bahrain Economic Quarterly (BEQ) issued by the Economic Development Board (EDB), Bahrain’s non-oil sector which constitutes more than 80% of Bahrain’s GDP reaching 5.0% grew noticeably above projections in the first quarter of 2015.
The report also highlighted broad-based real GDP growth of 2.9% on an annual basis, and strong labour market activity, with employment increasing by 5.0% compared with the same period in 2014.
The report observed a year-on-year growth rate of 8.3% in the social and personal services sector, overtaking the hotels and restaurants sector as the fastest-growing sector in 2014. The social and personal services sector is primarily made up of private sector healthcare and education activities. The manufacturing sector also saw 5.9% year-on-year growth.
Despite global economic challenges, the report finds that forward-looking indicators point to a high degree of continuity in the regional non-oil economy, reflecting the strength of key structural growth drivers and the commitment of regional governments and investors to long-term projects.
Strong growth of 7.5% year on year was reported in the construction sector, which is in line with the sector’s momentum that became apparent in the second half of last year and reflects continued infrastructure activity. Growth in the transport and communications sector followed closely with a 7.3% year on year expansion.The report also found that infrastructure activity had a marked effect on the labour market. The increase in total employment occurred at its quickest pace since Q2 2013, and was driven by the private sector, which represented 89% of the annual growth in total job creation during Q1. A fall in the unemployment rate was also reported in the first quarter of 2015, reaching 3.5% in March.
Bahrain is set to invest over US$22 billion in key infrastructure projects over the coming years, which aims to spur public and private sector participation across the manufacturing, energy, healthcare and education sectors. This includes a commitment to build 25,000 housing units over the coming four-year period.