Bahrain’s headline real growth rate increased sharply in the second quarter of 2018 to an annual rate of 2.4 percent, according to Bahrain Economic Development Board (EDB).
Its Bahrain Economic Quarterly Report showed a significant acceleration of growth from the previous quarter, underpinned by both the normalisation of oil production and markedly faster non-oil growth.
The report also noted that the regional economic recovery is progressing somewhat more slowly than initially expected.
While GCC growth is expected to accelerate to 2.5 percent this year and 3 pecent in 2019, this is below historical levels, it said.
The report added that business confidence has varied month to month while the growth of the non-oil sector has proved less pronounced that the expansion in the oil sector. This has prompted a number of governments to initiate economic stimulus programmes after a period of fiscal retrenchment.
Dr Jarmo Kotilaine, chief economist, Bahrain EDB, said: “Bahrain’s impressive improvement in the second quarter was thanks to a broad-based recovery across the whole economy. In particular, the expansion of Bahrain’s non-oil GDP stands out in the regional context.
"With the oil industry now only accounting for less than 20 percent of Bahrain's GDP, growth dynamics are critically linked to non-oil drivers. This compares to the situation in much of the rest of the region where the stronger growth has been led by higher oil prices and production.”
The report also predicted that renewed regional spending power will drive growth in cross-border tourism as the Bahraini tourism industry continues to grow across a broad range of metrics.
Visitor numbers are up 5.8 percent year-on-year and the average number of nights spent in Bahrain per visitor jumped by 16 percent.
According to the quarterly report, Bahrain’s non-oil GDP expanded by an annual 2.8 percent in the second quarter, driven by the construction (up 6.7 percent) and manufacturing sectors (up 4.5 percent).
The total value of foreign direct investment is also continuing to increase with the total value of projects facilitated by the EDB in the first nine months of 2018 being 138 percent higher than a year earlier.
Of the companies attracted by the EDB in the first three quarters of 2018, 31 out of the 76 companies fall in the manufacturing sector, the report added.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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