The start of the year is a time for reflection as well as looking forward. Starting with economic growth, whilst 2013 may have started slowly following the mid-year passing of the kingdom’s budget, government spending has accelerated, the financial sector has shown stability and growth, and inward investment across a range of sectors has continued. This has led to the continued acceleration in economic growth we saw last year, and we expect headline GDP growth to come in fairly close to the 5 percent mark.
My roles as minister of transportation and as acting chief executive of the Bahrain Economic Development Board (EDB) are ultimately interrelated, in that long-term stability and development require sustainable economic growth built on the following pillars: an open, liberal business environment, a skilled local force, competitive costs and a world-class transport infrastructure to support businesses requirements to access the growing GCC markets.
To support growth through 2014, the EDB is committed to sustaining and strengthening the core business fundamentals of Bahrain as a part of our ongoing programme of economic reform, supporting the business community, and helping foreign investors to access the opportunities for doing business here. These actions build on our position as a natural business hub for the broader GCC region, a place where businesses can benefit from excellent connectivity, an established track record of regulation and a skilled workforce.
This is underpinned by continued investment in core infrastructure, and strengthening our pan-GCC transport links. The upcoming Bahrain International Airshow acts as a platform to showcase Bahrain’s unparalleled regional connectivity as a major logistics hub with the closest links between road, sea, and aviation in the region. Its position in the logistics sector is being further strengthened with a major new port in operation, the expanded airport on the horizon and new rail links to supplement existing road links to Saudi Arabia. The event will also provide a clear boost to the economy in January 2014 as more than 20,000 trade visitors contribute to the economy in the kingdom through various sectors, such as the services sector, with the hospitality industry in particular gaining a significant increase.
Regarding challenges, it is encouraging to see the response to managing the kingdom’s sovereign debt position. The significant oversubscription for July’s issuance of a $1.5bn ten-year bond as bond yields and CDS spreads have reverted to pre-2011 levels, which highlights investor confidence in the steps being taken by the government. Also the fiscal stewardship has remained conservative with only modest deficits recorded in 2011 and 2012.
Globally, we have to be mindful of downward pressure on commodity prices, which provides added impetus to making sure that we can continue the challenge of diversifying the economy to support the creation of long-term, quality jobs for Bahrainis.
Nonetheless, given the progress made in 2013, and the continued global economic stabilisation, Bahrain enters 2014 confident that it remains a sound destination for international and regional business.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.
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