Bahrain expects to see non-oil sector growth of more than 3 percent in 2016 and 2.4 percent in 2017, the CEO of the country’s investment agency has predicted.
The non-oil sector grew by 3.6 percent in the second quarter of 2016, a marked acceleration from 2.7 percent in the first quarter of the year, according to official statistics published in October.
The sector, which accounts for more than 80 percent of gross domestic product (GDP), has continued to grow despite lower oil prices and global economic volatility.
Khalid Al Rumaihi, CEO of the Bahrain Economic Development Board, wrote in an article for Arabian Business: “Clearly this [lower oil prices] has put some pressure on growth in the short term, although in Bahrain the economy’s resilience means that we expect non-oil growth to record more than 3 percent for 2016 and 2.4 percent in 2017.”
He added: “But alongside the challenges, we view this trend as an opportunity in disguise. At a macro level, it is likely to mean a long-term shift from extensive growth driven by increases in capital, land and people to productivity-driven growth.”
However, Al Rumaihi, maintained that more than $32 billion of planned infrastructure projects announced earlier this year will continue to act as a countercyclical growth driver in the near term, with modernisation and expansion projects by state aluminium firm Alba, Bahrain International Airport and BAPCO all supporting longer term growth.
He said he expected the evolving financial technology (fintech) will offer new opportunities, particularly in the Islamic finance side.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.