A new report has predicted that Bahrain’s economy could grow by as much as three per cent this year.
Oxford Economics says that inward investment and support from other Gulf states has led to one of the strongest GDP growth predictions in the GCC.
“The implementation of unprecedented levels of infrastructure investment in Bahrain has helped boost the growth of the kingdom's non-oil sector,” said the Economic Development Board.
Bahrain has reduced its public expenditure in line with other Gulf nations during the past two years, as oil prices have shown few signs of recovering to pre-2014 levels.
However, its economy has been boosted by investment from neighbouring countries, namely “the UAE committing significant resources to the expansion of Bahrain International Airport,” reports Gulf News. Kuwait is also investing in road projects throughout the country.
Non-oil growth alone was up by 3.7 per cent in 2016, demonstrating that Bahrain’s attempts to diversify its economy are slowly but surely paying off. Raising extra tax revenue through the introduction of VAT in 2018 should also bolster the country’s economic outlook.
With the economy relatively stable, the government has been able to turn its attention to employment of nationals. In May, it announced a new initiative called Taqdeer – offering financial incentives to private organisations employing Bahraini nationals, including help to pay their employees' health insurance.
Oman enjoyed a boost to the long-term prospects of its oil economy last week when it helped broker a deal involving the Organisation of Petroleum Exporting Countries (OPEC). The member nations (and some non-members) all agreed to cut production of oil, with the long term aim of increasing demand and the price per barrel. Oman will reduce its oil production by 4.5 per cent as part of the agreement.
In the short term, it will mean less oil is being produced and sold but in the long term, the price is expected to benefit from controlled production.
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