Bahrain non-oil growth reaches 4.7% in Q3 2016
Growth in the non-oil sector of Bahrains economy reached an annual rate of 4.7% in the third quarter of 2016, marking a clear acceleration from the 3.6% pace seen during Q2, according to the latest figures published in the Economic Development Boards Bahrain Economic Quarterly.
Overall, during the first three quarters of 2016, the Bahraini economy expanded by a real 3.6% over the corresponding period in 2015. This compares to headline growth of 2.9% during 2015 as a whole.
The third quarter of 2016 saw Bahrains non-oil economy gather momentum in spite of fluctuating oil prices and international volatility that has placed downward pressure on regional and global growth. There was strong expansion across a range of sectors, with particularly robust performances in social, personal services, construction and financial services.
Bahrains resilient performance underscores the strength of structural growth drivers in a highly diversified economy. Beyond this, a growing number of regulatory reforms introduced in Bahrain have contributed to the countrys ability to defy regional trends and foster innovation and growth.
Key steps in this regard include a range of measures to cut the time to export goods to Saudi Arabia via the King Fahd Causeway, reduced minimum capital required for start-ups, and regulatory innovation to support the creation of investment limited partnerships, protected cell companies and trusts.
A key factor underpinning the momentum in the non-oil economy remains an unprecedented pipeline of large-scale infrastructure projects, the implementation of which has accelerated over the last year. Key projects include a $3bn project for Albas sixth pot line, an associated $800mn power station deal, a $1bn contract for the airport modernisation programme, and a new $355mn Banagas gas plant.
Investment by the GCC Development Fund is an important element in this project pipeline. The total value of projects that have broken ground has more than doubled to a total of $3.1bn since the end of 2015. During the same period, the value of tendered projects rose by 20.5% to over $4.3bn.
Speaking on the publication of the report, EDB chief economic advisor Dr Jarmo Kotilaine, commented: Encouragingly, we continue to see strong resilience in the non-oil sector in Bahrain as the economy continues to outpace the global and regional averages. The build-up of infrastructure projects is not only helping to stimulate short-term growth, but will also help underpin the long-term diversification and growth in productivity that we will need to support our prosperity in the future.
However, while we know that hard infrastructure is vital, it is not enough on its own. We also need to address the soft infrastructure the laws and regulations that are going to encourage investment, that are going to make it easier for companies to do business and make it easier to grow. We have already made considerable progress in recent months and there are a number of other reforms we expect to see in the near future.