Bahrain economic growth to slow down

Manama

Bahrain's economic growth this year is expected to slow down to 2.7 per cent, down from 4.0pc last year, a study has revealed.

 The report 'Economic Insight: Middle East Q2 2015' is a quarterly economic forecast published by Centre for Economic and Business Research (CEBR), an acknowledged expert in global economic forecasting and a partner to Institute of Chartered Accountants in England and Wales (ICAEW).

 The report mainly focuses on the Middle East as being the Gulf Cooperation Council (GCC) member countries (United Arab Emirates [UAE], Bahrain, Saudi Arabia, Oman, Qatar and Kuwait), plus Egypt, Iran, Iraq, Jordan and Lebanon, which it abbreviated as 'GCC+5'.

 "Despite a slight boost after hosting the Formula One Grand Prix in April, Bahrain's economic growth in 2015 as a whole is expected to slow to 2.7pc, down from 4.0pc last year. Given that 90pc of government revenues come from oil and gas, the country will be severely affected by the drop in oil prices," the report states

 "After annual expansion of 5.1pc in third quarter of 2014, Bahrain’s growth for 2014 as a whole is set to amount to 4.0pc, driven by construction and infrastructure spending. While the momentum from this development activity will continue stimulating the non-oil sector in 2015, sluggish growth in oil production and lower prices moderate the pace of fiscal expansion," the report added.

 "Bahrain is on the right path for diversifying its economy, but with lower oil prices here to stay, more action needs to be taken. Reducing subsidies is a right step as this will help reduce the strain on public finances. Also, if fuel subsidies are removed during a period of subdued oil prices, the inflationary impact will be felt less sharply by the population," said ICAEW Economic Adviser and Associate Director at Cebr Scott Corfe.