Oil sector drives Bahrain’s growth to 4.2pc
Manama, September 11, 2013
Bahrain's gross domestic product (GDP) grew by 4.2 per cent in the in the first quarter of this year, bolstered by the return of Abu Sa'afa oilfield to full capacity after unscheduled maintenance last year, a report said.
The Bahrain Economic Quarterly report from the Economic Development Board (EDB) indicated that the growth of non-oil GDP was slower than expected in the first half but is expected to increase in the second half of the year as government spending continues to increase after the state budget was approved in June.
"The EDB currently expects overall GDP growth of 5.3 per cent for the current year, with the non-oil sector growing by 4.1 per cent and the oil sector by 10.3 per cent (due to the large rebound from the fall in oil production last year)," the Gulf Daily News, our sister publication, quoted the report.
Fiscal policy and project spending should support non-oil growth in the second half of the year, it said.
The state budget was approved in June with significant spending increases, some of them backdated to the beginning of the year.
At the same time, work is expected to begin with some of the projects financed from the GCC Development Fund.
"This should permit a significant acceleration in non-oil growth in the second half of the year," the report said.
It also indicated that the Bahraini capital markets have experienced a clear recovery during the year.
As of August 29, the benchmark BAX index of Bahrain Bourse had posted an 11.5 per cent year-to-date gain.
The best performing individual sector was commercial banks which experienced a 31.4 per cent gain year-on-year, followed closely by the industrial sector with a 30 per cent gain.
Bahrain in late July issued a $1.5 billion 10-year international bond which attracted strong demand.
The bond offers a coupon of 6.125 per cent. Subscriptions quickly rose to nearly $8bn, which allowed for tighter pricing than the initial guidance of 6.5 per cent.
Bahrain sold the bonds to yield 6.2 per cent.
Growth in Bahrain should further benefit from the robust expansion of the regional economy as well as growing indications of a recovery globally.
"Although recurrent emerging market jitters are likely in the face of potential monetary tightening in the US, the global economy is looking slightly more robust," it said, adding "reversals are possible in view of the multitude of risks that still exist, but present configuration should prove supportive of growth in Bahrain." – TradeArabia News Service