Growth in Bahrain’s non-oil economy has risen above projections, by five percent during the first quarter of 2015, according to new official statistics.
The latest quarterly bulletin from Bahrain’s Economic Development Board (EDB) highlighted real annual GDP growth of 2.9 percent and strong labour market activity, with employment increasing by 5 percent compared with the same period last year.
The report also found that the hydrocarbons sector had declined by 5.7 percent year on year.
However, growth in the non-oil economy – which the EDB said constitutes more than 80 percent of Bahrain’s GDP – saw strong growth reaching 5 percent. This is above the EDB’s projections of 4.5 percent.
Growth was recorded in several sectors, including the social and personal services sector (healthcare and education), which overtook the hotels and restaurants sector as the fastest growing sector with 8.3 percent year-on-year growth.
The construction sector, meanwhile, recorded 7.5 percent growth year on year, and the manufacturing sector grew by 5.9 percent year on year.
Growth in the transport and communications sector followed closely with a 7.3 percent year on year expansion.
Despite global economic challenges, the EDB said, the statistics suggest “a high degree of continuity in the regional non-oil economy, reflecting the strength of key structural growth drivers”.
The report also claimed employment was growing at its quickest pace since the second quarter of 2013, and was driven by the private sector, which represented 89 percent of annual growth in job creation during the first quarter of the year.
There was also a 3.5 percent drop in unemployment – the lowest level recorded since the third quarter of 2012.
Government revenues rose by 11 percent in 2014 and expenditures declined by 11 percent, placing the country in a stronger fiscal position, the EDB said.
Khalid Al Rumaihi, chief executive of the EDB, said: “The report highlights the strong performance of Bahrain’s non-oil sector, with growth coming in above our projections.
“This reflects Bahrain’s diversification efforts over the past decade and the general resilience of the GCC economies at a time of doubts about the global recovery.
“Even as Bahrain’s hydrocarbons sector experiences a decline due to seasonal maintenance, headline real GDP expanded by 2.9 percent and we continue to project robust growth throughout 2015 and 2016.“
Bahrain is set to invest over $22 billion in key infrastructure projects over the coming years, including a commitment to build 25,000 housing units over the next four years.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.