Non-oil sectors to boost growth

Despite the 15 per cent contraction experienced in the oil sector in Q1, Bahrain economy is forecasted to mark a strong end to 2018 largely thanks to key non-oil sectors such as the construction sector and the accelerated pace of project implementation.

Non-oil sector holds key for the favorable economic outlook for Bahrain, according to the Economic Development Board.

EDB Chief Economist Dr Jarmo Kotilaine yesterday discussed EDB’s Bahrain Economic Quarterly report, which indicated promising signs that the economy is on an upswing.

According to him, non-oil sector will grow to 4.3 per cent in 2018 while the GDP is projected to grow 3.4pc. He said that the forecasts are part of the report, which also forecasts 2019 GDP growth to be at 3pc. He said that rebounding oil prices is also a cause for optimism for the Kingdom.

“The GCC has benefited from higher oil prices. We are now at a point where the oil prices have reached a new range which is somewhere in the neighborhood of 65 to 70 or even 80 dollar per barrel. “The new oil market dynamics will entail volatility. OPEC, a while back, set out to rebalance the global oil market, I think they have succeeded.”

“There is a major concern about Venezuela, where the production levels are plummeting; that economy now is in free-fall. It is the nation with the largest known oil reserves.

“So that is contributing to market tightness, of course the American shale producers are there to increase output, US is now the biggest producer.”

“For the GCC, last year as a region as a whole, growth came in at more or less zero percent, because of the OPEC led production cuts.

“This year we are looking at a quite significant trend reversal, while last year the oil sector has brought everyone down, this year it is bringing everyone up.