Large-scale infrastructure projects helped boost the performance of Bahrain’s non-oil sector in the first quarter of 2017, according to the Bahrain Economic Development Board (EDB).
The publisher of Bahrain Economic Quarterly, EDB reported that the country’s non-oil economy grew 4.4% in Q1 2017, up from 3.7% in 2016.
EDB attributed the growth to a strong non-oil private sector, with momentum reportedly being supported by large investments in infrastructure developments like the $3bn (BHD1.1bn) Alba Line 6 project.
Other examples cited by the EDB report include the $1.1bn (BHD414.8m) investment being made in the country’s airport modernisation programme and the $335m (BHD126.3m) that has been earmarked for a new Banagas gas plant.
EDB also pointed out that expressions of interest (EOI) have been solicited for the construction of the King Hamad Causeway, which will add to the existing King Fahd Causeway, connecting Bahrain to Saudi Arabia and serving as a platform for the GCC railway.
GCC Development Fund active projects also saw an increase in their aggregate value, EDB said. It added that the cumulative total worth of GCC Development Fund projects that had broken ground by Q2 of 2017 reached around $3.2bn (BHD1.2bn), marking a 111.3% increase on the active pipeline from Q1 of 2016.
Commenting on the report, Jarmo Kotilaine, chief economic advisor of EDB, said: “As the region continues its transition in a low oil price environment, the Bahraini [economy] offers further encouraging indications, both of its resilience and the progress of diversification.
“The Q1 growth figures are very encouraging and underscore the impact both of the government’s reform agenda and the powerful counter-cyclical impact of the unprecedented infrastructure project pipeline.”
He added: “We are confident that recent initiatives, such as the creation of a regulatory sandbox for fintech and investment in creating the world’s largest single-site aluminium smelter will continue to support growth and to make Bahrain an attractive destination for businesses looking to access the opportunities in the region.”
In addition to the infrastructure sector, hotels and restaurants, financial services, and transportation and communications industries also demonstrated strong performances in the first quarter of 2017, said EDB.
In a statement, EDB noted that hotels and restaurants emerged as the fastest growing single sector during Q1, posting a 12.3% year-on-year (YoY) real rate of expansion. Meanwhile, financial services posted an annual expansion of 8.3% at the end of Q1, compared to 5.2% in 2016, and the transportation and communications sector recorded an annual real growth rate of 8.2% in Q1.
Overall, Bahrain’s economy expanded by 2.9% in Q1 2017, in line with the 3% pace observed in the whole of 2016, according to EDB.