Bahrain fastest growing economy in ME: EDB
Manama : Making Bahrain the fastest growing economy in the Gulf Cooperation Council (GCC), the Kingdom’s non-oil sector accelerated to a record growth clocking 4.8 per cent pace in the first nine-months of 2017.
This growth, according to the latest EDB report, is “encouragingly” almost entirely driven by the private sector.
Hotels and Restaurants, Social and Personal Services, Transportation and Communications, and Financial Services all expanded more than 6pc year-on-year real growth during the first three quarters of 2017.
“All of this points to the continued strong progress of economic diversification in an economy where the non-oil sector collectively already generate more than 80pc of GDP,” said Dr Jarmo Kotilaine, Chief Economic Advisor of the Bahrain EDB, in the report.
During 2017 as a whole, non-oil growth is expected to exceed the 4.0pc pace recorded in 2016, according to the Bahrain Economic Quarterly published by the Bahrain Economic Development Board (EDB).
Growth in the sector, according to the EDB report, also meant that overall economic growth in the Kingdom reached an annual pace of 3.6pc for the first three quarters of the year – improving on the 3.2pc pace of growth posted during 2016.
“Bahrain’s economy continues to deliver at the upper end of growth expectations thanks to a combination of robust structural and countercyclical drivers,” said Dr Kotilaine.
He said that EDB expects this “positive dynamic” to continue into 2018 as the regional environment becomes more supportive and as the diversified economy continues to expand, supported by an “unprecedented investment pipeline”.
“As growth becomes increasingly underpinned by improvements in productivity, Bahrain’s investment in infrastructure, regulatory reform and development of human capital will play a vital role in ensuring long-term, sustainable prosperity and expansion,” added Dr Kotilaine.
While growth is benefiting from a range of structural drivers, non-oil growth is particularly boosted by large-scale infrastructure investments at a time of historically subdued oil prices and low government spending growth.
The overall investment project pipeline is estimated to have increased by nearly 20pc last year and is led by USD32bn worth of strategically important priority projects that are progressing according to plan. These range from the airport modernisation project to the expansion of the Alba aluminium smelter and the Bapco (refinery) Modernization Project.
The report also points out that in many areas project implementation has been accelerating and this is set to continue in 2018. During 2017, as a whole, the value of tendered projects as part of the GCC Development Fund rose from USD3.9bn to more than USD4.1bn. The cumulative amount of money disbursed almost doubled from USD751mn in 4Q16 to USD1.4bn a year later.
Alongside a strong performance in the first nine months of 2017, Bahrain has also put in place a number of initiatives including the regulatory framework for FinTech and the regulatory sandbox to position the Kingdom to benefit from future growth opportunities in emerging sectors.
Bahrain is also set to launch the first dedicated FinTech hub and corporate incubator in the Middle East and Africa region in February.
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