Non-oil sector propels Q1 growth in Bahrain

Jakub Porzycki via Reuters Connect

• Kingdom’s economy expanded by 2% in first quarter
• Non-oil sector recorded 3.5% growth, while oil dropped 5.9%

Bahrain’s economy expanded by 2 percent in the first quarter of 2023, driven by a 3.5 percent rise in real GDP for the non-oil sector, the finance ministry said in its quarterly economic report.

The oil sector recorded a 5.9 percent drop in real GDP, as seasonal maintenance led to a downturn in production.

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Nominal GDP for Q1 was down 4.2 percent year on year, because of a 20.7 percent fall in the oil sector. This was driven by the drop in Brent crude prices since Q1 2022, as well as the lower production levels.  

The oil sector contributes close to 15 percent of GDP in Bahrain, which has been named the best country in Middle East for expats.

The best-performing non-oil sector was transport and communication, which recorded 11.2 percent growth in Q1. It accounts for 7.3 percent of real GDP in the kingdom.

Real estate and business activities recorded 5.3 percent growth year on year, while financial corporations grew by 4.9 percent and hotels and restaurants by 4.3 percent. 

Manufacturing GDP dipped by 1.1 percent while the figure for construction fell by 1.3 percent.

Bahrain’s real GDP is forecast to grow 2.9 percent in 2023, the ministry said. The non-oil sector is predicted to rise 3.5 percent while the oil sector remains steady.

Growth of 3.2 percent is expected in 2024.