Non-oil sector to drive Bahrain, GCC growth
Manama, March 4, 2014
By Avinash Saxena
The non-oil private sector is expected to be the key driver of growth for Bahrain and the GCC region, said a top economist.
Economic Development Board (EDB) chief economist Dr Jarmo Kotilaine said he expects Bahrain's non-oil sector growth to accelerate over four per cent with loan growth supported by continued public spending and infrastructure investments, reported the Gulf Daily News, our sister publication.
"With oil sector growth expected to remain flat, the headline gross domestic product (GDP) growth is expected at three to 3.5 per cent," he said.
Dr Kotilaine said this at a Press conference on the agenda and expectations of the Euromoney GCC Financial Forum that starts here today (March 4). EDB is partnering Euromoney for the two-day event being held at the Ritz-Carlton Bahrain, Hotel and Spa.
"The overall economic outlook for the GCC remains positive supported by large infrastructure projects, stimulus measures and accommodative monetary policy."
"Significant diversification efforts among the GCC countries have made their economies reduce dependence on petroleum products," the economist said.
According to him, the combination of slow increase in global demand for oil, higher output from other regions, and increased market penetration by non-Opec countries will dampen oil prices and limit gains in market share by the GCC countries in the period ahead.
Changes in oil earnings have broader implications for domestic economic activity in the GCC countries.
There is an opportunity for the private sector to play a more active role, either directly or through public private partnerships, and although overall the elements are in place for this to deliver sustainable development, there need to be standards and structures that enable this, he said.
"Much still needs to be done to develop economic sectors that are not dependent on oil income, he stated.
"The accent on education and the launch of higher education and research programmes in association with international universities could trigger positive momentum to improve local human capital and encourage the development of high value-added activities," Dr Kotilaine said.
Euromoney Conferences director of emerging markets Richard Banks, who also addressed the Press conference, said the forum will look at the role that financial services can play in regional development.
"We'll be looking at how capital, always the most mobile of commodities, flows across borders in the GCC and the wider region. There will be a focus on Bahrain on the second day - looking at key sectors in that kingdom which have a relevance for the wider region: Real estate, housing, SMEs and hydrocarbons," he added.-TradeArabia News Service