MANAMA: Bahrain's industrial and financial sectors continued to grow in the second quarter of this year in spite of disruptions to the economy and a challenging global outlook, according to the Bahrain Economic Quarterly.
The report showed that the financial sector in Bahrain grew by 1.7 percent in the second quarter of 2011 compared to the same quarter last year.
There were particularly strong performances for local financial institutions and the insurance sector, which grew by 4.3 percent and 3.9 percent respectively and offset a decline in the offshore sector.
Manufacturing grew by three percent over the year up to June, which precedes new announcements by German firms, BASF and RMA, and French company, Imerys, who have all committed to establishing new operations at the Bahrain International Investment Park.
The report also found that business loans were 3.4 percent larger in the second quarter than in the first three months of the year, with a 15 percent increase in loans to the manufacturing sector.
The increase in business activity comes after the Government adopted a number of stimulus measures, such as the suspension of labor fees, levied by the Labor Market Regulatory Authority on foreign employees, a measure which was recently extended until the end of the year. Other measures included a wage increase for public workers and a rise in the debt ceiling.
Bahrain's economic strength and long-term stability was underlined this month as it raised $750m from international financial markets through a seven-year sovereign sukuk, or Islamic bond. The IMF forecasts Bahrain's economy to grow by 1.5 percent in 2011, with growth increasing to 3.6 percent in 2012.
Shaikh Mohammed bin Essa Al-Khalifa, chief executive of the Bahrain Economic Development Board, said: "These figures are encouraging. Manufacturing offers a very clear opportunity to widen and further diversify the Bahrain economy and these figures follow some very positive announcements in this sector, with more foreign investment on the way.
"The financial sector is very important to Bahrain's economic growth, not least because no other sector makes a bigger contribution to our GDP and because the sector provides more than 9,000 Bahraini jobs. However, it is also vital in providing the engine that drives the rest of the economy and the increase in business loans is an excellent example of that."
The figures announced in the report on the financial sector supplemented statistics published by the Central Bank of Bahrain last week that showed the number of banking institutions in Bahrain has risen from 401 to 408 year-on-year.
Additionally, the Bahrain Economic Quarterly also cited growth in sectors bolstered by stimulus spending including transport and communication.
The report said the sectors adversely affected by unrest in the first quarter and the wider global economic downturn, included real estate, construction and hospitality.
The Bahrain Economic Quarterly forms part of the Economic Development Board's emphasis on transparency in building an attractive investment climate for foreign companies.
The Economic Development Board holds responsibility for Bahrain's Vision 2030 and National Economic Strategy, which are designed to drive the private sector as an engine of growth, support further diversification of the economy and ultimately elevate national living standards by creating greater opportunities for all Bahrainis.
© Arab News 2011
