Bahrain posts solid Q2 growth
Manama, November 22, 2011
Bahrain’s industrial and financial sectors continued to grow in the second quarter despite disruptions to the economy and a challenging global outlook, according to a new report.
The Kingdom's financial sector grew by 1.7 per cent in the second quarter compared to the same period last year, said the Bahrain Economic Quarterly report which was launched today.
There were particularly strong performances from local financial institutions and the insurance sector, which grew by 4.3 and 3.9 per cent respectively and offset a decline in the offshore sector, the report stated.
Manufacturing grew by 3 per cent over the year up to June, which precedes the new announcements by German firms, BASF and RMA, and French company, Imerys, who have all committed to set up operations at Bahrain International Investment Park, it added.
The Economic Quarterly report also found that business loans were 3.4 per cent larger in the second quarter than in the first three months of the year, with a 15 per cent increase in loans to the manufacturing sector.
According to the report, the increase in the business activity came about after the Government adopted a number of stimulus measures, such as the suspension of labour fees, levied by the Labour Market Regulatory Authority on foreign employees, a measure which was recently extended until the end of the year.
The 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 $750 milion from international financial markets through a seven-year sovereign sukuk, or Islamic bond.
The IMF has forecast that Bahrain’s economy will grow by 1.5 per cent in 2011, with growth increasing to 3.6 per cent in 2012.
Commenting on the report, Shaikh Mohammed bin Essa Al-Khalifa, chief executive of the Bahrain Economic Development Board (EDB), said the figures were very 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,' he noted.
'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,' said Shaikh Mohammed.
'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,' he added.
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 stated that the sectors adversely affected by unrest in the first quarter and the wider global economic downturn, included real estate, construction and hospitality.
The quarterly report forms part of the EDB’s emphasis on transparency in building an attractive investment climate for foreign companies.
The EDB 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.-TradeArabia News Service