Bahrain's non-oil sector grew 4.4 per cent in the first quarter of this year up from 3.7 per cent in a year-earlier period, thanks to government infrastructure investments, according to the Bahrain Economic Development Board (EDB).
Overall, during the first three months of 2017 the Bahraini economy expanded by 2.9 per cent, in line with the 3 per cent pace seen in 2016 as a whole. In April, the IMF forecast economic growth of 2.3 per cent for this year, driven by infrastructure spending from GCC funds.
Jarmo Kotilaine, chief economic adviser of the Bahrain EDB, said:
“The Q1 growth figures are very encouraging and underscore the impact both of the government’s reform agenda and the powerful countercyclical impact of the unprecedented infrastructure project pipeline."
The government is investing in key projects that include the US$3 billion Alba Line 6, which will see Bahrain home to the largest single-site aluminimum smelter in the world, a further $1.1bn is being invested in modernising the airport and $335m is being lined up for a new Banagas plant.
The fastest growing area was hotels and restaurants with a 12.3 per cent year-on-year rate of expansion. Transportation and communications also came in with a robust 8.2 per cent expansion and financial services posted an annual growth of 8.3 per cent at the end of the first quarter compared to 5.2 per cent in the same period the year before.
The country is currently in the midst of a fintech push, which has seen its central bank develop a new mobile-optimised payment and settlement mechanism and the launch of a new mobile wallet, made available to Bahrain Telecommunications Company’s (Batelco) 1.4 million mobile customers.
Mr Kotilane 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.”
