Bahrain’s highly diversified economy continues to show steady growth, where the third quarter of 2018 saw this driven yet again by the non-oil sector.
The review of the kingdom’s performance as published in the Bahrain Economic Quarterly (BEQ) for Q3-2018 shows the non-oil sector expanded by 2.4 per cent year-on-year led by the construction sector.
Another stellar performance was posted by exports of local origin products, which shot up by 9pc year-on-year during the period from January to November last year.
The report sees GCC fiscal rebalancing boosting confidence and contributing to economic continuity more broadly in the region.
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Such confidence is reflected in an acceleration of growth across the GCC, although the average growth rates will be markedly lower than pre-2008 years due to the unprecedented infrastructure boom in the region, the report highlighted.
The BEQ, published by investment promotion agency Economic Development Board (EDB), noted that infrastructure remains a key driver of growth, but now goes hand-in-hand with a stronger emphasis on productivity-promoting measures being seen across the Middle East.
As the Bahrain economy continues to diversify away from hydrocarbons, the BEQ found that Bahrain’s annual real GDP growth of 1.6pc in the third quarter was underpinned by expansion in the construction and manufacturing sectors, as well as increased infrastructure spending.
Project activity in the GCC-funded projects alone has seen a major build up, with the cumulative total active projects rising by 16.3pc year-on-year (YoY).
Apart from the continued infrastructure build-up, Bahrain is seeing increased investment in technological modernisation and innovation.
Most notably, such factors are driving change within the country’s rapidly-growing fintech cluster, but they are also key behind the ongoing expansion in manufacturing.
In reflection of demographics and diversification, construction has long been an important source of growth and the sector expanded by 5.4pc year-on-year in Q3.
Overall it grew by 6.2pc in the first three quarters of 2018.
Not only is construction performing strongly on its own, it also has an important multiplier effect on other parts of the non-oil economy such as real estate, finance, manufacturing, and trade.
Growth in construction feeds through into strong momentum in allied sectors.
Real estate and business activities grew by 3.2pc in the first nine months of the year, whereas manufacturing rose 3pc YoY in the third quarter and was up 3.8pc in the first three quarters of 2018.
Such an increase in domestic manufacturing, most notably in metals led by aluminium has fed through to a boom in non-oil exports, up more than 9pc YoY in the first 11 months of 2018.
