Bahrain’s non-oil sector grew by 3.6 per cent in the second quarter of 2016, a marked acceleration from 2.7 per cent in the first three months of the year, according to a new report released today by the Bahrain Economic Development Board (EDB).
The sector, which accounts for more than 80 per cent of GDP, has demonstrated continued resilience in the face of lower oil prices and considerable global economic volatility, said the latest Bahrain Economic Quarterly.
This momentum has been seen across a number of sectors and is strongly underpinned by the ongoing implementation of a $32 billion pipeline of strategically significant infrastructure projects in the Kingdom. For instance, the total cumulative value of the active projects financed by the GCC Development Fund has reached nearly $4 billion, more than tripling in less than a year. Also a number of real estate, transportation, and manufacturing projects, such as Alba Line 6, are progressing well.
Non-oil growth has been broad-based, the report said. The fastest growing individual sector during the second quarter of 2016 was social & personal services, a category dominated by private education and health care. It has been consistently one of the most dynamic sectors of the economy in recent years and grew by an annual 9.9 per cent in Q2.
The financial services sector has continued to perform well with a 4.0 per cent pace of real growth in Q2. Likewise, the manufacturing sector expanded by 3.3 per cent in Q2 in a near-tripling of the pace seen in Q1.
Growth across the private sector was also supported by growth in bank credit, with the average annual rate of credit growth during the first half of the year reaching 7.2 per cent, and the cost of credit remaining stable, declining slightly in the course of the first half of the year.
Khalid Al Rumaihi, chief executive of the EDB, commented on the findings of the BEQ report: “The resilience the economy has demonstrated reflects the strength and maturity of the non-oil private sector in Bahrain – we are very pleased to see continued growth even in the face of considerable headwinds.
“In the coming years we expect the GCC economies to move from a model of extensive growth, driven by increased people, land and capital, to productivity-led growth. The large infrastructure investments we are currently seeing and the strength of the non-oil private sector will be important in creating opportunities for investors and ensuring that Bahrain continues to thrive.”