Bahrains economy recovers in Q3 mirroring global trends

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MANAMA: Bahrain’s economy grew at 1.4 per cent in real terms during the third quarter last year, in line with global trends, shows the latest government data.

The GDP growth of 10.8pc in nominal terms (not adjusted for inflation) indicates the recovery is in line with that witnessed by the global economy during the third quarter of 2020, after the contractions over the first half of the year as a result of the repercussions of the Coronavirus (Covid-19) pandemic and the decline in global oil prices.

The Q3 2020 Bahrain Economic Quarterly report by the Finance and National Economy Ministry says real GDP growth on a quarterly basis comes as a result of expansion in both the oil sector (+1.7pc) and the non-oil sector (+1.3pc).

However, a year-on-year comparison between Q3-2019 and Q3-2020 shows a contraction of 6.9pc in real GDP, and 9.2pc in nominal terms.

The report says the leadership of His Majesty King Hamad and the direction provided by His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince Prime Minister, which saw the announcement of an unprecedented package of relief measures, with a value exceeding BD4.5 billion, and the gradual reopening of business activity have enabled growth in a number of non-oil sectors.

During the quarter ended September last year, hotels and restaurants saw the fastest growth with real sectoral growth of 71.1pc quarter-on-quarter (QoQ) supported by an increase of 42.9pc in the number of visitors through King Fahd Causeway and 147.3pc through the Bahrain International Airport as well as an 53.8pc QoQ increase in the average hotel occupancy rate at 4-and 5-star hotels.

Expansion

This was followed by the transport and communications sector which jumped at 22.4pc, and the manufacturing sector which grew at 4.2pc, supported by an 11.8pc QoQ increase in production at the Bapco refinery, while the financial sector saw an expansion of 3pc.

Growth in the oil sector was driven by a 0.3pc QoQ increase in overall production at both the Bahrain and Abu Saafa fields as well as a 7.4pc increase in the production of natural gas.

Major infrastructure projects continued to see progress over Q3-2020, with the value of projects under the GCC Development Fund increasing during the quarter by $0.2 billion, following the award of several contracts for the provision of electricity and water services and housing units in Madinat Salman.

Moreover, work on the Bapco Modernisation Programme, one of the biggest projects in the kingdom’s history, reached 60pc completion and is on track for completion by the third quarter of 2022.

The latest report also highlights Bahrain’s latest achievements in several international rankings.

The kingdom ranked second among the Arab countries in the Human Capital Index 2020 issued by the World Bank Group, which focuses on the health and education sectors and measures the level of human capital that a child born today can expect to attain by the age of 18.

Bahrain also ranked third in the Arab world in the Prosperity Index 2020 issued by the Legatum Institute, which measures the level of prosperity across several pillars within the areas of society, economy, and empowering people in terms of education and health, and first in the Arab world in the Basel Anti-Money Laundering Index 2020 issued by the Basel Institute for Governance.

avinash@gdn.com.bh

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