MANAMA: Bahrain was the fastest-growing economy in the GCC during the first nine months of last year, with a rate of 3.6 per cent, says the Economic Development Board (EDB).
The latest Bahrain Economic Quarterly published by the EDB shows that the country’s non-oil sector beat expectations with 4.8pc growth for the same period.
For 2017 as a whole, non-oil growth is expected to exceed the 4pc pace recorded in 2016 and the performance of the non-oil private sector also meant that overall economic growth for the first three quarters of the year improved on the 3.2pc rate posted during 2016 as a whole.
“With momentum remaining strong, estimates of non-oil growth in 2018 have been upgraded to 4.1pc,” said EDB’s chief economic advisor Dr Jarmo Kotilaine, while sharing key findings of the report with the media yesterday at the EDB’s office in Arcapita Building, Bahrain Bay.
“Bahrain’s economy continues to deliver at the upper end of expectations thanks to a combination of robust structural and countercyclical drivers.
“We expect this positive dynamic to continue into 2018 as the regional environment becomes more supportive of growth and as the diversified economy continues to expand, supported by an unprecedented investment pipeline.”
According to him, with growth becoming 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.
Non-oil growth in Bahrain is almost entirely driven by the private sector at a time of fiscal austerity, the report says.
The positive momentum is broad-based, characterised by strong performances across a number of areas.
The fastest-growing sectors in Q3 2017 were, once again, Social & Personal Services (mainly private education and health care) at 9.3pc YoY, followed by Hotels & Restaurants at 8.6pc and Trade at 7.7pc.
Transportation & Communications expanded by 5.8pc YoY while the Real Estate & Business Activities sector was 4.6pc larger than the year before.
The overall pace of YoY growth during the first three quarters of 2017 taken together broadly mirrored the Q3 figures.
The fastest growing single sector was Hotels & Restaurants which expanded by 11.4pc.
It was followed by Social & Personal Services at 9.7pc and Trade at 8.8pc.
Transportation & Communications grew by 6.6pc and Financial Services by 6.4pc.
By contrast, Construction sector growth moderated to 1.7pc and Manufacturing barely expanded by 0.5pc.
All of these point to the continued strong progress of economic diversification in an economy where the non-oil sector collectively already generate more than 80pc of GDP.
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 $32bn worth of strategically important priority projects that are progressing according to plan.
These range from the $1.1 bn Airport Modernisation Project to the $3bn expansion of the Alba aluminium smelter and the $5bn Bapco Modernisation Project.
In many areas project implementation has been accelerating and this is set to continue this year.
For instance, during 2017 as a whole, the value of tendered projects as part of the GCC Development Fund rose from $3.9bn to more than $4.1bn.
The cumulative amount of money disbursed almost doubled from $751m in 4Q16 to $1.4bn a year later.
Survey data among local businesses concurs with the non-oil growth momentum reflected by the national accounts, although it also reflects differences in growth patterns among sectors.
According to the Quarterly Business Perceptions Survey (QBPS) undertaken by the Information & eGovernment Authority (iGA), over a quarter of the respondents had a favourable impression of the performance of the economy in Q3.
The 26.1pc reading marked a decline from 35.9pc in Q2.
Most respondents were neutral.
They accounted for 60.8pc of the total as compared to 51.4pc in Q2.
Forward-looking expectations have become marginally more cautious.
Nonetheless, nearly half the respondents – 47.7pc - were optimistic regarding Q4.This compares to 52.6pc reading a quarter earlier.
The share of neutral respondents was almost comparable at 46.1pc, which was up from 41.4pc in Q3. email@example.com