Bahrain’s non-oil growth in Q3 2015 reached 3.3% according to the latest Bahrain Economic Quarterly (BEQ) issued by the Economic Development Board (EDB), with growth in the first three quarters as a whole reaching 4.2% in the non-oil sector.
Overall growth in the economy reached 2.4% in the third quarter and 3% over the first three quarters as a whole. Growth was driven by the continued resilience of the non-oil sector.
This performance was underpinned by robust performance across a number of sectors. In particular, the report revealed that the Hotels and Restaurants and the Social and Personal Services (primarily private education and private healthcare) sectors were among the key drivers of growth within the non-oil economy for Q3 2015, with a year-on-year growth rate of around 8% and 6.3%, respectively. Transportation and communications also saw strong growth of 6% during the quarter.
The resilience of the non-oil sector, including the growing pipeline of infrastructure projects, helped to support job growth, with the total number of private sector jobs rising by an annual 7% YoY in Q3. Consistent with the positive momentum in job creation, overall unemployment declined to its lowest level in several years. The official unemployment rate held steady at 3.1% in Q3.
The BEQ also highlighted expectations of further growth in key sectors such as infrastructure, with nearly USD6 billion worth of projects allocated, USD3.7 billion tendered and USD1.3 billion commenced to date. This will have a positive impact on the construction sector in the upcoming years.
In the banking sector, bank credit continued to grow at a brisk pace with total bank credit increasing by 7% as of the end of Q3.
In recent months, Bahrain has seen a number of developments in the financial services, ICT and manufacturing sectors. In November the Central Bank of Bahrain (CBB), in collaboration with the local Benefit Company, launched a pioneering Electronic Fund Transfer System (EFTS) that connects all retail banks in the Kingdom with each other and with major billers in order to increase the efficiency of fund transfers.
In the ICT sector, the EDB in collaboration with C5 Accelerate Limited and Amazon Web Services (AWS) announced the launch of the first Cloud Accelerator in the Middle East and Africa region which will be located in the Kingdom, with participant businesses eligible for funding from the Cloud Accelerator’s USD 100million allied venture capital fund. Additionally, Synergies Castings Ltd and Mumtalakat announced the establishment of an aluminium casting and speciality alloy wheel manufacturing facility in Bahrain. The USD150mn facility will produce the equivalent of 2mn vehicle alloys a year, an annual capacity of approximately 25,000 metric tonnes.