Bahrain’s economic growth rebounds in first quarter
MANAMA: Bahrain’s economic growth rebounded in the first quarter this year as oil prices recovered and activity in the country increased, as per the latest government assessment.
Revealed in the Q1-2021 Bahrain Economic Quarterly Report by the Finance and National Economy Ministry, the nominal (at current prices) gross domestic product (GDP) for the first three months of the year (Q1) grew by 1.5 per cent on a quarterly and by 0.3pc on an annual basis.
Based on preliminary national accounts data for Q1-2021 provided by the Information and eGovernment Authority, the report finds that the expansion was supported by a 29.3pc surge in the oil sector when compared with Q4-2020, and by 16pc when compared with Q1-2020.
Production
The sector’s growth resulted from an increase in total oil production from the Abu Safah oil fields and the rise in global oil prices.
However, the non-oil sector dragged overall growth by registering declines of 1.9pc on a quarterly basis and by 1.8pc on an annual basis.
The GDN has reported earlier that Bahrain’s GDP contracted by an estimated 5.8pc in real terms in 2020 as the pandemic and lower oil prices reduced consumption and investment activities.
In particular, it was hit by contractions in larger GCC economies, given the close linkages between the countries through the tourism, transportation and real estate sectors.
The non-oil economy contracted by 7pc in real terms.
An infographic explains Bahrain’s GDP growth in the first quarter
A deeper contraction was mitigated by government stimulus measures, with the full package amounting to BD4.5bn (about 32pc of GDP), mostly including a BD3.7bn increase in loan facilities from the CBB and about BD290m (2pc of GDP) in budgeted stimulus measures.
The Q1 report from the ministry says the economic recovery in a number of non-oil sectors during the first quarter of 2021 reflects the national efforts to address the pandemic, and the continuation of support programmes for the sectors most affected within the financial and economic package, the gradual opening up of commercial activities, and the efforts of the national vaccination campaign.
The transportation and communications sector topped the list of sectors that recorded a recovery, growing 6.5pc during the first quarter of 2021 compared with the fourth quarter of 2020.
Social and personal services saw a growth of 3.8pc sequentially, while in annual terms the financial sector logged the highest growth of 9.4pc followed by manufacturing, which expanded by 7.5pc.
The financial and manufacturing sectors also equally made the highest contribution to the non-oil nominal GDP at 17.9pc, whereas government services had a share of 13.3pc.
In other key economic indicators for the quarter, total oil production was up 1.4pc while total production by the Bapco refinery was 15.6pc higher on a quarterly basis.
Money
Broad money supply or M3 (cash in circulation + private sector deposits on demand in BD + private time and savings deposits + government deposits) was up 0.2pc.
Average hotel occupancy of both four- and five-star hotels combined was 23.1pc, new CR issuances were up 11.2pc and national origin exports were up 14.3pc.
In the Q4-2020 Bahrain Economic Quarterly Report, the kingdom’s projected real GDP growth rate was 3.7pc for 2021.
Real GDP is an inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year, as against nominal GDP which does not factor changes in prices of goods and services.
In April 2021, the International Monetary Fund (IMF) revised upwards its growth forecast for Bahrain’s economy to 3.3pc this year from 2.3pc last October.
US research firm S&P Global Ratings expects the kingdom’s real GDP to expand by 2.7pc this year.
For the three-year period till 2024, S&P expects Bahrain’s GDP growth to average about 2.3pc.
avinash@gdn.com.bh
Source: https://www.gdnonline.com/Details/950223/Bahrain%E2%80%99s-economic-growth-rebounds-in-first-quarter
