Bahrain's GDP to grow 2.9pc

Manama : The Economic Development Board (EDB) expects Bahrain’s Gross Domestic Product (GDP) to grow by 2.9 per cent in 2016.

EDB Chief Economist Dr. Jarmo Kotilaine said the forecast rate would enable the Kingdom to maintain the same rate of economic growth achieved last year.

Speaking at a press conference in Seef district, he said that the non-oil sector growth reached 3.9pc, a figure that reflects the resilience of structural growth drivers in the economy, specifically the continued positive momentum of diversification along with a sizeable infrastructure pipeline.

In spite of important elements of continuity, the continued downward pressures on oil prices, along with steps toward fiscal re-engineering, is likely to curb growth somewhat in the near-to-medium term. This negative impact is likely to be countered to a significant extent by the large pipeline of infrastructure projects.

During the year as a whole, the growth contribution of the non-oil private sector was 2.8pc. Government services contributed 0.3pc, whereas the contribution of the oil sector was 0.2pc.

Growth in Q4 of 2015 was led by the Social and Personal Services sector, which is dominated by private education and healthcare. YoY growth in the sector reached 6.9pc during the year as a whole.

The Construction sector expanded by 6.4pc, Hotel and Restaurants sector expanded by 7.3pc, Transportation and Communications grew by 5.9pc whereas Manufacturing expanded by 4.1pc during the year as a whole.

80.3pc of Bahrain’s real GDP and 84.9pc of its nominal GDP was generated by an increasingly diverse non-oil sector in 2015. The oil and gas sector accounted for 19.7pc of the Kingdom’s GDP in 2015. In current prices, this proportion is 15.1pc.

The non-oil economy continues to be dominated by three large sectors: Financial Services, Manufacturing, and Government Services. The Financial Services sector accounted for 16.4pc of Bahrain’s real GDP in 2015, whereas its nominal GDP share was 16.7pc. Manufacturing made up 14.6pc of real GDP and 16.8pc of nominal GDP. The corresponding figures for Government Services were 12.7pc and 13.7pc respectively.

The export bundle, traditionally dominated by oil products, has also seen fairly consistent growth of services and non-oil merchandise exports. 

The total value of non-oil goods traded has increased by around 19pc since 2010. Bahrain’s total non-oil merchandise imports reached US$12.4bn in 2015.

The GCC region approximately accounted for 28pc of Bahrain’s total non-oil trade and 50pc of the total value of non-oil exports. The large pipeline of infrastructure projects in Bahrain has proven resilient in the face of global and regional uncertainties.

The total value of projects tendered rose from US$2.2bn in Q4 to US$3.6bn a year later. A further increase to US$3.8bn was observed by the beginning of March. The value of projects, which have commenced, rose from US$459mn in Q4 2014 to US$1.3bn a year later.

Following a remarkable US$1.3bn worth of project awards in January-February, this figure rose to US$3.2bn as of 1 March 2016. The main funding priorities of the projects funded to date are housing (US$2.1bn), electricity and water (US$1.3bn), the airport (US$1bn), and roads (US$0.7bn).