BAHRAIN’S economic growth is expected to accelerate to 3.8 per cent this year, strongly driven by the non-hydrocarbon sector which is anticipated to grow by more than 4pc, it was declared.
Green growth opportunities in Bahrain and the GCC region were also highlighted during a seminar organised by the Finance and National Economy Ministry yesterday.
According to experts, the easing of pandemic restrictions and positive developments in the hydrocarbon market drove strong recoveries in 2021 and 2022 across the GCC.
The World Bank’s ‘Gulf Economic Update: Green Growth Opportunities in the GCC’ report revealed that the outlook for the GCC region is positive, driven by a robust performance of the oil and non-oil sectors.
“World GDP (gross domestic product) growth is now projected to slow sharply this year to around 2.9pc and to edge up only slightly to 3pc in 2023 – this is well below the pace of recovery projected last January,” revealed the report, which was released at the seminar at the Finance and National Economy Ministry headquarters in the Diplomatic Area.
“Compared with other regions, the GCC region is a bright spot, projected to expand by 6.9c in 2022 before moderating to 3.7pc in 2023.
“This has fully closed the performance gap with other high-income countries left by the pandemic and the GCC is now poised to outperform.”
According to the report, the GDP of the GCC region is expected to be close to $2 trillion and if business in the region ‘continued as usual’ their combined GDP growth would grow to an expected $6 trillion by 2050.
However, embracing a green growth strategy could see the GCC GDP grow to over $13trn by 2050, revealed World Bank Group experts yesterday.
“Despite efforts by the GCC countries, diversification is still below potential and while there is progress in the non-oil economy, the success is limited in non-oil exports,” said World Bank Group GCC countries, Middle East and North African Region regional director Issam Abousleiman.
“Structural reforms must continue to help nurture a competitive private sector.
“There is, however, an excellent and timely opportunity to further diversify the economy using a green growth strategy.
“The extra windfall to the GCC from higher oil prices can be used to start new high-growth, green industries that would help the economies of the region grow by an extra three to six per cent.
“Moving away from fossil fuels towards a greener future should not be seen as a threat but as a tremendous opportunity, as the costs of renewable energy have fallen dramatically in recent years.”
Mr Abousleiman added that the region has the potential to be a lead producer of green and blue hydrogen with the right regulations, policies and investments to support the transition, GCC countries can emerge with stronger, more sustainable economies that generate rewarding jobs for their youth while simultaneously protecting the planet.
According to the report, government revenues increased by 52pc in the first half of 2022 in Bahrain due to higher oil prices and the doubling of the Value Added Tax (VAT) rate.
“All GCC countries have been trying to diversify their economies but progress to date in expanding non-oil exports in relation to imports has, however, been limited,” added the World Bank Group in its report.
“Only Bahrain has managed to close this ‘competitiveness’ gap.
“The Central Bank of Bahrain set new rules governing crowdfunding-based activities to help create new tools to finance small businesses and broaden the pool of liquidity.
“Bahrain also announced a new financing scheme for government housing, which includes raising loan ceilings and age requirements for beneficiaries.”
reem@gdnmedia.bh
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