Bahrain’s economy grew by 2% year-on-year in the second quarter of 2023, driven by a 2% expansion in the non-oil sector and a 2.2% increase in the oil sector.
Details were revealed yesterday in the Bahrain Chamber of Commerce and Industry’s 2023 Q2 Regional Economic Overview report.
The Kingdom’s largest and most influential economic body, formerly known as Bahrain Chamber of Commerce and Industry (BCCI), helps businesses make informed decisions on investment, employment and other strategic matters. We conduct a comprehensive assessment of Bahrain’s economy on a quarterly basis with the aim of:
It also aims to help governments and other stakeholders develop policies that promote economic growth and create jobs.
According to the Q2 2023 report, the transportation and communications sector grew the fastest at 13.3%, followed by hotels and restaurants at 9.6% and real estate and business activities at 4.9%.
The financial institutions sector remains the largest contributor to GDP at 17.3%, followed by the oil sector at 17.1% and the government services sector at 14.1%.
Trade between Bahrain and GCC countries in the second quarter decreased slightly compared to the same period in 2022, decreasing by 5% from $2.09 billion to $1.98 billion.
Saudi Arabia remains Bahrain’s largest GCC trading partner, with trade exchanges valued at $960 million.
Globally, China remains Saudi Arabia’s largest import partner, with total imports of $518 million. Smartphones were the largest imported product, accounting for 10% of total imports from the Asian giant.
Brazil was Bahrain’s second largest import partner in the second quarter of 2023, with total imports amounting to $430 million. Non-lumped iron ore and concentrates were the largest imported commodities, accounting for 94% of total imports from the South American country.
The UAE was Bahrain’s third largest import market, with total imports valued at $401 million. Gold ingots were the most imported commodity, accounting for 41% of his imports from neighboring GCC countries.
The chamber found that business loan interest rates rose year-on-year in all sectors in the second quarter of 2023.
In the construction and real estate sector, interest rates rose from 5.15% to 9.06%. In the manufacturing sector, it increased from 4.67% to 8.12%, and in the trade sector, it increased from 5.87% to 9.35%.
impact
The combined impact of the pandemic and digitalization has led to a decline in ATM withdrawals. ATM withdrawal transaction value decreased by 10% from BD 357.8 million in Q2 2022 to BD 322.5 million in Q2 2023.
In contrast to ATM withdrawals, point of sale (POS) transactions grew by 5% in Q2 2023, from BD 975 million in 2Q 2022 to BD 1.026 billion in 2Q 2023. It became 10,000 BD.
Supermarket transaction value decreased by 4% from BD 103 million in Q2 2022 to BD 99 million in Q2 2023.
Similarly, department store transaction value also decreased by 7% from BD 36 million in Q2 2022 to BD 33 million in Q2 2023.
The report also shows that the total number of insured persons in the labor market increased by 3.3% year-on-year in the second quarter of 2023, increasing from 597,782 to 617,233.
The number of Bahrainis employed in the private sector increased by 1.1% year-on-year during the quarter, while the number of non-Bahrainis increased by 4.1% over the same period. However, the number of Bahrainis employed in the public sector slightly decreased by 0.3% year-on-year in the second quarter of 2023.
Regarding inflation, measured by the Consumer Price Index, the report revealed that it rose by 0.4% in June 2023 compared to June 2022.
The most notable changes during this period were a 6.1% increase in food and non-alcoholic beverage prices, a 6.1% increase in recreational and cultural prices, a 2.4% increase in miscellaneous goods and services, and a 2.4% increase in clothing and footwear prices. The decline was 4.8%. .
The IMF projects real GDP growth in the Middle East and Central Asia to increase from 2% in 2023 to 3.4% in 2024, the report added, while global inflation is also expected to increase from 6.9% this year to 3.4% in 2024. The company wrote that it is expected to decline to 5.8%. .
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