Bahrain’s economy remains resilient so far this year with non-oil sector growth reaching 3.6% in the second quarter of 2016 as against a rise of 2.7% in the first three months of the year, Bahrain News Agency (BNA) reported quoting Bahrain Economic Quarterly released by the Economic Development Board (EDB)
Dr Jarmo Kotilaine, EDB’s Chief Economist, who addressed a roundtable with the local media, explained that non-oil growth has been broad-based. “The fastest growing individual sector during the second quarter of 2016 was social and personal services, a category dominated by private education and health care. It has been consistently one of the most dynamic sectors of the economy in recent years and grew by an annual 9.9% in Q2,” the chief economist said.
The sector, which accounts for more than 80% of GDP, has demonstrated continued resilience in the face of lower oil prices and considerable global economic volatility. This momentum has been seen across a number of sectors and is strongly underpinned by the ongoing implementation of a $32 billion strategically significant infrastructure projects in the Kingdom. For instance, the total cumulative value of the active projects financed by the GCC Development Fund has reached nearly $4 billion, more than tripling in less than a year. Also, a number of real estate, transportation and manufacturing projects, such as ALBA Line 6, are progressing well.
The financial services sector has continued to perform well with a 4.0% real growth in Q2. Likewise, the manufacturing sector expanded by 3.3% in Q2, nearly triple of the growth registered in Q1.
Expansion in bank credit
Growth across the private sector was also supported by expansion in bank credit, with the average annual rate of credit growth during the first half of the year reaching 7.2%.
“The resilience the economy has demonstrated reflects the strength and maturity of the non-oil private sector in Bahrain. We are very pleased to see continued growth even in the face of considerable headwinds,” Khalid Al Rumaihi, Chief Executive of the EDB, said, commenting on the BEQ report.
“In the coming years, we expect the GCC economies to move from a model of extensive growth, driven by increased people, land and capital, to productivity-led growth. The large infrastructure investments we are currently seeing and the strength of the non-oil private sector will be important in creating opportunities for investors and ensuring that Bahrain continues to thrive.”
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