Bahrain’s annual real GDP growth of 1.6 percent in the third quarter was underpinned by expansion in the construction and manufacturing sectors, as well as increased infrastructure spending, said the Bahrain Economic Development Board (EDB) in a new report.
Project activity in the GCC-funded projects alone has seen a major build up, with the cumulative total active projects rising by 16.3 percent year-on-year (YoY), according to the Bahrain Economic Quarterly (BEQ) published by the EDB.
Apart from the continued infrastructure build-up, Bahrain is seeing increased investment in technological modernization 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 the Kingdom’s demographics and diversification, construction has long been an important source of growth and the sector expanded by 5.4 percent year-on-year in the third quarter. Overall it increased 6.2 percent in the first three quarters of 2018.
Not only is construction performing strongly on its own, it also has an important multiplier effect into the country’s ecosystem, especially in other parts of the non-oil economy such as real estate, finance, manufacturing, and trade. Growth in construction feeds through into strong momentum in these allied sectors. Real Estate and Business Activities grew by 3.2 percent in the first nine months of the year, for example.
Substantial investment in infrastructure is not only benefiting the construction industry, but the overall Bahraini economy. Large projects such as the opening of the Alba Line Six, which now makes the aluminium smelter the largest in the world, and the Bahrain Petroleum Company (Bapco) Modernization Program, are just two of the many large-scale infrastructure developments being undertaken across the Kingdom.
These projects not only create jobs and investment during the construction process, but have a long-term impact through increased exports and broader competitiveness.
The commitment to Bahrain’s long-term prosperity from the public and private sector is increasingly recognized around the world. Ongoing investment by overseas multinationals such as Mondelez and Arla in the Kingdom’s manufacturing capabilities has resulted in a clear acceleration in the sector’s growth.
Manufacturing rose 3.0 percent YoY in the third quarter and was up 3.8 percent 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 9 percent YoY in the first 11 months of 2018.
TradeArabia News Service