Kingdom of Bahrain’s provisional National Accounts Statistics Report for Q1 2019 published by Information & eGovernment Authority (iGA), with preliminary results indicate that Bahrain’s economy grew by 2.73% at constant prices and 3.43% at current prices compared to the same period in 2018.
The National Accounts’ further designate that the growth of the real gross domestic product (GDP) for the non-oil sector recorded 1.52% in Q1 2019 compared to the same period in 2018, while the oil sector real GDP grew by 9.2%.
The hotels and restaurants sector sustained strong growth rates of 7.08% at current prices and 8% at constant prices during the first quarter. In addition, the financial corporations sector grew by 3.41% at current prices and 3.52% at constant prices, whereas the construction sector witnessed a growth of 4.65% at current prices and 2.86% at constant prices.
Additionally, the Report showed notable year-on-year improvements, in real terms, in Q1 2019 in various sectors:
– 1.27% in the real estate and business activities sector
– 1.33% in the trade sector
– 1.49% in the transport and communication
– 1.08% in the social and personal services sector
– 2.09% in the private educational services sector
– 0.22% in the private health services sector
Furthermore, the Report indicated a year-on-year contraction, in real terms, in Q1 2019 in a number of sectors:
– 2.61% in the agriculture and fishing sector
– 3.1% in the manufacturing sector
– 1.06% in the government services sector
– 0.73% in the electricity and water sector
The Kingdom of Bahrain’s Ministry of Finance and National Economy said the strong economic growth results in the first quarter of 2019 reflects the government’s commitment to balancing fiscal consolidation efforts with economic development. Bahrain’s economy recorded a year-on-year real gross domestic product (GDP) growth rate of 2.7% in Q1 2019 compared with the same period in 2018.
Non-oil sector real GDP growth reached 1.5%, with large contributions from the hotels and restaurants sector, which recorded the fastest growth in all sectors of 8%, followed by the financial corporations and construction sectors, which expanded by 3.5% and 2.9% respectively. The oil sector’s real GDP grew by 9.2%, driven by the increase in crude oil production rates of 7.8%.
The Ministry noted that the largest non-oil sector contributor to Bahrain’s GDP is the financial corporations sector, contributing around 16.8%. The manufacturing sector comes second with a contribution to GDP of 14.1%, followed by government services sector at 12.7%, the transportation and communications sector at 7.6%, and the construction sector with a contribution to GDP of 7.4%.
The Ministry highlighted the expansion of the Kingdom’s tourism sector. Bahrain attracted 3.2 million inbound tourists in the first quarter of 2019, an increase of 3.1% over the same period last year, while the number of international arrivals entering the country reached 3.5 million, an increase of 3.1% over the same period last year. Hotel occupancy rates at 5-star hotels reached 53% in Q1 2019 compared to 50% in the same period last year while occupancy rates at the Kingdom’s 4-star hotels reached 46% compared to 42% during the same period last year.
Financial sector performance data also continues to improve. Money supply (M3) increased significantly, reaching BD13.2 billion at the end of the first quarter of 2019 – a 6.5% increase. The data also indicates that Bahrain’s foreign exchange reserves almost doubled to BD1.1 billion while and the total value of outstanding loans and credit facilities provided by retail banks amounted to BD9.6 billion, recording an increase of 7.1% on the prior year.
In the construction sector, the number of building permits issued rose by 4.2%, as infrastructure projects continue to drive growth in the non-oil economy. The state budget for the years 2019-2020 included 66 infrastructure projects with a total value of BHD1.3 billion, with notable projects including the expansion of the Bahrain International Airport.
The Ministry also noted that the economy’s strong performance was evident in a range of other economic indicators. The total value of exports increased 19.3%, while imports decreased by 10.5%, leading to a drop in the trade deficit by 41.1%. In addition, the market capitalization of the Bahrain Stock Exchange increased by 14.6%.
The Kingdom of Bahrain succeeded in raising the value of foreign direct investment (FDI) in 2018 to USD1.5 billion, compared to USD1.4 billion in 2017, an increase of 6%. FDI represents 4% of GDP, higher than the global average of 2%. The United Nations Conference on Trade and Development (UNCTAD) recently issued its annual report for 2019, in which it revised its data to conform to the data of the Kingdom of Bahrain, a positive step and an important event for the credibility and accuracy of the Kingdom’s national data.
The Ministry stated that real GDP growth for 2018 has also been revised up following the inclusion of new economic data. The revised results indicate that the national economy recorded a real GDP growth rate of 2.5% in 2018 and a non-oil sector real GDP growth of 3.4%.