Bahrain non-oil sector forecasts to grow further

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An acceleration in the pace of project implementation in the first quarter of 2018 is expected to underpin faster non-oil growth in Bahrain throughout the course of the year, according to the Bahrain Economic Quarterly.

The forecast for strong growth across the year as a whole comes in spite of a weaker performance in the first three months of 2018. Bahrain’s growth in Q1 2018 was negatively impacted by a one-off maintenance-related reduction in oil production, leading to a 15 per cent contraction in the oil sector. Non-oil sector growth in the quarter remained positive but slowed due to a combination of base effects after a period of accelerating growth and the lagging impact of anticipated unevenness in infrastructure project implementation in the second half of 2017.

However, the economic outlook is favourable due to a number of factors. After a period of slower growth in 2017, the YoY rate of real expansion in the construction sector has accelerated markedly to 6.7 per cent during the first three months of 2018. Construction has always been an important driver of growth in other non-oil sectors and the renewed momentum in the first quarter suggests sectors such as manufacturing, trade, real estate and financial services are likely to benefit over the course of the year.

This growth in construction is partly the result of a rapid increase in the pipeline of projects tendered as part of the GCC Development Fund to a cumulative total of just over $5.1 billion. This compared to less than $4.2 billion at the end of 2017.

 

Source Credit: Zawya

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