The Economic Development Board (EDB) said that the Kingdom’s Q3 GDP growth reached 5.1% year-on-year (YoY), which continues the momentum from earlier in 2014 and reflects the positive impact of the initiation of a number of significant infrastructure projects. Overall growth for 2014 is forecasted to have been in excess of 4%.
The latest Bahrain Economic Quarterly (BEQ) also highlights the resilience of Bahrain’s non-oil growth. This was particularly apparent in the construction sector, which experienced acceleration from 3.6% annual growth in Q2 to 12.3% in Q3, making it the fastest growing sector of the economy. The hotels and restaurants sector also posted strong YoY growth of 7.4%. The hydrocarbons sector in Bahrain has continued to expand throughout the year, with a 4.7% YoY gain in Q3.
Looking forward, the BEQ posits that the performance of the Bahraini economy in the near term is likely to benefit from a number of positive drivers, which should translate into robust near-term growth figures. Above all, the build-up in infrastructure spending will continue. Spending from the Gulf Development Fund will be the main driver in this regard, but initiatives are underway also to activate a number of significant priority projects that will draw on a range of funding sources, including private investment.
Dr. Jarmo Kotilaine, Chief Economist at the EDB, said:
"In spite of increased volatility in the global oil markets, economic growth in Bahrain has remained robust with clear indications that infrastructure spending is significantly boosting the momentum in the non-oil sector, and serving as an important platform for continued resilience."
Globally, the structural growth drivers have not yet recovered to the point of strong, broad-based momentum, and the pattern of growth across various countries remains uneven. The BEQ shows that growth dynamics across the GCC region continue to be characterized by strong structural drivers in the non-oil economy alongside modest growth in the oil economy. The resilience of the non-oil economy is further supported by healthy financial sectors along with a firm commitment by GCC governments to support economic activity and priority projects.