MANAMA – Despite continuing global economic uncertainty, the Bahraini economy has been fairly resilient to external shocks and the Kingdom's real GDP growth is currently estimated to exceed 6 percent this year, said a report. The annual pace of economic growth in the first three quarters of 2012 was 4.4 percent, led by a strong rebound in the non-oil sector of the economy, with overall growth for the year estimated at 3.9 percent, according to the latest economic quarterly report from the Bahrain Economic Development Board (EDB). The 2012 has been a year of steady consolidation for the Bahraini economy with progress across all main sectors of the economy recording positive growth, the report stated. The Kingdom's growth is likely to pick up further in 2013 due to planned large-scale industrial investments and growth in infrastructure spending, it added. The rebound in economic activity has been supported by a significant increase in lending by Bahraini retail banks. The country's retail banks are in generally robust health and have been working to remobilize their liquidity after a period of elevated risk aversion, said the EDB report. The strengthening of the short and long-term picture for the Bahraini economy has been reflected in the fact that Standard & Poor's has recently revised its outlook on the Kingdom from ‘negative' to ‘stable'. According to EDB, the Kingdom's growth is also likely to pick up further in 2013 due to planned large-scale industrial investments and growth in infrastructure spending. The Bahraini economy is fairly resilient to external shocks and it is currently estimated that real GDP growth could exceed 6 percent this year. Commenting on the report, Kamal bin Ahmed, the Minister of Transportation and the acting chief executive of EDB, said: "The latest economic quarterly report demonstrates that Bahrain's economy continues to strengthen and after achieving solid growth in 2012, the economy is well-positioned to continue to achieve steady and sustainable expansion in 2013 and beyond." "In particular, the Kingdom plays an important role as a gateway to the rapidly expanding GCC economies, and the opportunity this offers for investors is demonstrated by the strong performance of key non-oil and gas sectors," he added. Output from the Abu Safa oil field which Bahrain shares with Saudi Arabia was below normal for most of 2012 because of technical problems, hurting growth, the board said. Bahrain relies on the field for some 70 percent of its budget revenue. But the technical problems were fixed in November and this will boost economic growth in 2013, along with higher output from an onshore Bahraini oil field, the board said. Meanwhile, the economy will benefit this year from major industrial investments, including a $4.8 billion oil refinery upgrade and the building of a $2.2 billion production line at Aluminium Bahrain, it said. Most of the non-oil private sector grew solidly last year and bank lending began to pick up, setting the sector up for strong growth in 2013, the board added. On the $10 billion aid pledged by wealthier Gulf states, the EDB said this money is expected to start flowing in 2013-2014, stimulating the economy. Saudi Arabia had last month set a plan to send $448 million to Bahrain, to be spent on housing, education and other projects. The board predicted inflation would stay stable at 3 percent in 2013 and 2014, flat from last year's level, and that the government would run a small budget surplus of 0.6 per cent of GDP this year after a deficit of 1 per cent in 2012. – Reuters
