Non-oil sector expands 4.7 per cent in H1 2017
Manama : Driven by robust growth in the hospitality sector, Bahrain’s non-oil sector grew 4.7 percent in the first half of 2017, also outpacing the overall economic growth of 3.4pc, according to the latest Bahrain Economic Development Board (EDB) report. In 2016, the Kingdom’s non-oil sector grew 4.0pc.
The EDB report attributes the growth to momentum in the sectors including Hotels & Restaurants, Social & Personal Services (mainly private education and healthcare services) and Financial Services, which all expanded more than 7pc year-on-year in the period.
Overall real economic growth reached an annual pace of 3.4pc for the first half of the year, a small further improvement over the 3.2pc pace posted during 2016 as a whole, the report titled ‘Bahrain Economic Quarterly’ said.
In the second quarter of 2017, the overall non-oil growth rate was 4.3pc, slightly short of the 5.2pc annual pace seen in Q1. This, however, remained firmly ahead of the 3.7pc rate recorded during 2006 as a whole. Overall economic growth during the quarter was 3.3pc in line with the 3.5pc growth pace during Q1.
Sector-wise growth
The fastest growing sector was Hotels & Restaurants, which posted a 13.4pc YoY rate of expansion, a slight acceleration from the 12.3pc pace seen in Q1.
Social & Personal Services sector YoY rate of growth in Q2 was 9.8pc, almost exactly in line with the 10.1pc pace seen in Q1.
Financial Services sector continued to post robust growth, expanding by an annual 7.6pc in Q2, down slightly from 8.3pc in Q1.
The Trade sector saw a clear pick-up in activity from 3.6pc in Q1 to 5.6pc in Q2.
“The fact that growth figures have once again surprised on the upsides attests to the exceptional strength of the countercyclical growth drivers in the Bahraini economy, notably the unprecedented project pipeline, led by major ventures such as the airport modernization,” said Dr Jarmo Kotilaine, Chief Economic Advisor of the Bahrain EDB.
“However, growth is also increasingly benefiting from important structural reforms,” he said. Bahrain, during the first half of this year, adopted initiatives such as crowdfunding regulations, a regulatory sandbox for fintech companies and a Cloud First policy (designed to help organisations take advantage of cloud technology).
“As a result of this and the opportunities being created by economic transformation across the region, we are seeing bigger and brighter names attracted to Bahrain,” added Dr Jarmo Kotilaine. Amazon Web Services will be opening its first Middle East Region here by 2019.
Tourism industry
Bahrain’s tourism industry is growing steadily. According to the Bahrain Tourism & Exhibitions Authority, the aggregate total number of tourists visiting Bahrain during the first three quarters of 2017 was 8.7mn – up 12.8pc on 1-3Q16.
“With development projects worth approximately US$10 billion under construction across the Kingdom this trajectory is set to continue in the near future,” said Dr Kotilaine.
Bahrain has a pipeline of infrastructure projects worth over US$32 billion either under construction or scheduled for the near future.
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