By Gavin Davids
Hospitality and manufacturing biggest growth sectors driving economy, says report
Bahrain’s economy is on target to reach four percent year on year growth for 2010, meeting analysts’ expectations, a report released by the Bahrain Economic Development Board has said.
Earlier in the year, analysts from Standard and Poor's and the IMF visited Bahrain and predicted that the near term outlook for the Gulf state would be favourable.
“Buoyed by the rebound in oil prices, the continuing recovery in the global economy and fiscal stimulus, growth is expected to accelerate from the three percent recorded in 2009 to four percent in 2010, and further to five percent in 2011,” the IMF said in a report it submitted after its visit.
The sectors that saw the biggest gains were hospitality, up fifteen percent, and manufacturing, which grew by eight percent. Financial corporations, transport and communication sectors each grew six percent, while construction and wholesale and retail trade inched up five percent respectively.
“We are delighted that to see that economic growth continues to meet our expectations, which illustrates the benefits of our tried and tested single regulator and the strength of our prudent, business friendly economic policies,” Sheikh Mohammed Bin Essa Al Khalifa, chief executive of the Bahrain EDB said in a statement.
In addition to the IMF report, Standard & Poor recently reaffirmed its ‘A’ rating for Bahrain’s sovereign debt, stating that it reflected the government’s net financial asset position, renewed development of its hydrocarbon resources and its strong international alliances.
“The CBB’s existing macro prudential tools have worked well in preventing excesses from building up in the domestic financial system and will continue to play a key role in insulating the economy from fluctuations in global capital markets,” the IMF report added.
EDB also said that it expects Bahrain’s workforce to grow by an average annual rate of 4.5 percent over the next decade, it said in its report, based on the expected growth of the working age population and an increased female participation in the workforce. This would provide a spur to the kingdom’s projected GDP figures, it added.
“With expected workforce growth of 4.5 percent and out per worker growth of one percent, the growth strategy projects annual average GDP growth of 5.5 percent over the decade,” the report said.