Bahrain experienced overall GDP growth of 5.6% in Q2 2014, when compared to the same period a year earlier, according to the latest Bahrain Economic Quarterly (BEQ) issued by the Economic Development Board (EDB) today. The report also revealed that Q2 2014 GDP growth reached 3.2% in comparison to the first quarter of 2014, with the total GDP growth of the year 2014 expected to reach about 3.7%.
In addition, the report highlighted the important contribution of the oil and non-oil sectors to the overall robust economic growth. The non-oil sector grew by 4.7% year-on-year during Q2 2014, while the oil sector registered 9.3% growth. When compared to the previous quarter, the non-oil sector registered a rise of 3.0% and the oil sector registered a rise of 4.1%.
Dr. Jarmo Kotilaine, Chief Economist at the EDB said, "The quarterly report underlines the significant contribution of a number of key sectors to overall GDP growth. It also highlights the major role played by big projects in boosting sentiment and fostering the economic capabilities in Bahrain. Together, these factors play an important role in diversifying the national economy."
The report also revealed that the hotels and restaurants as well as the transport and communications sectors were among the key drivers of growth within the non-oil economy for Q2 2014, where growth exceeded 10% in each of these sectors, continuing the strong Q1 momentum. Social and personal services experienced growth of around 8% year-on-year. Strong performance was also registered in the transport and communications sector, which grew by almost 6%.
The report also shed light on the benefits that the tourism sector will gain through the implementation of the new visa policy which began in early October, with over 100 nationalities set to benefit. This will be reflected, along with other factors, in the continued positive momentum of the non-oil economic sector in the second half of this year.
Additionally, the report highlighted the importance of various new large-scale projects in increasing the productive capacity of the national economy.
Alba has received approval for the gas allocation needed to support its planned sixth production line, which is expected to start operating in 2018. The Line 6 project will add 400,000 tonnes to the smelter's current 890,000-tonne capacity and is expected to cost around $2.5 billion.
Other upcoming projects include the creation of the BD31 million oncology centre at the King Hamad University Hospital, which will accommodate 120 beds, and is expected to be completed in 2016. The Electricity and Water Authority (EWA) in Bahrain also announced its plans to build three power plants, with an expected cost of approximately BD 280 million.