Non-oil growth is on the up in Bahrain, where economic diversification efforts are under way.
The picture above is that of Manama sea front © Shutterstock
by Oscar Rousseau 06 Feb 2019
Both sectors led the kingdom’s economy to diversified growth in Q3 2018, new government data shows
Bahrain’s non-oil economy expanded by 2.4% during Q3 2018, according to data from Bahrain Economic Development Board (EDB).
Construction and infrastructure expansion played a prominent role in driving growth for the smallest economy in the GCC.
Bahrain is in the midst of a modernisation and economic diversification drive, as Gulf nations wean their economies off oil. The latest statistics from government agency EDB indicate efforts to create a diversified economy are showing signs of promise.
New project infrastructure spending increased by 16.3% year-on-year during the quarter, while exports surged 9% during the first nine months of 2018. Bahrain’s construction sector expanded by 6.2% between January and November 2018, with manufacturing up by 3.8%, and real estate and business deals rising by 3.2%.
EDB’s research was published in Bahrain Economic Quarterly, which stated that modest GDP growth was underpinned by construction, infrastructure, and manufacturing in the kingdom.
Megaprojects have played a major role as well in the last 12 months, with one such prominent scheme being Aluminium Bahrain’s (Alba) Line 6 Smelter, which was fired up in December 2018.
Alba has become the world’s largest aluminium smelter as a result of the Line 6 expansion.
Bahrain Petroleum Company’s modernisation drive, which includes expansion of Bahrain Refinery, is another scheme hailed for its positive impact.
These projects are known to create jobs and drive up investment during construction, and are expected to lead to long-term social and economic benefits. Bahrain is also seeing greater investment in technological modernisation and innovation, which is supporting productivity in the kingdom, according to the government agency’s research.
Chief economist at EDB, Dr Jarmo Kotilaine, said fiscal rebalancing would boost investor confidence and continue to support the growth of Bahrain’s economy in the future.
“With increased economic uncertainty around the world and lower growth trends in the Middle East overall, Bahrain can expect to see resilient growth thanks to its commitment to diversification and sustainability,” he said.
“As the gateway to the Gulf region, it is unsurprising that investment is flowing into sectors such as construction, [information communications tech], and fintech, thanks to Bahrain’s strategically important location, its economic benefits, and ease of doing business.”