MANAMA: In the wake of record low oil prices, Bahrain real GDP growth is forecasted at 3.88% for 2014, below its GCC benchmark average growth of 4.20% for the same year, according to KAMCO GCC Economic Quarterly report released on Sunday.
Quoting preliminary numbers from the CIO, the report added that during Q4-14 Bahrain’s nominal GDP declined by 4.2% q-o-q to BD3.1billion as compared to BD3.3billion during Q3-14. The decline as compared to Q4-13 stood at a slightly lower 1.1% primarily due to the decline in oil prices during the last quarter of 2014.
However, data showed that in terms of constant prices, Bahrain’s real GDP growth slowed to 4% y-o-y in Q4-2014, the weakest rate since 3.2% in Q1-14. Detailed data for the components of GDP was unavailable for Q4-2014, however, during Q3-2014, the key component of the GDP, namely, non-oil sectors, continued the strong momentum of last quarter to grow by an equivalent 2.7% in Q3-2014 and stood at BD 2.4 billion as of Sep-2014. Whereas, the oil sector saw a marginal drop of 0.1% compared to a growth of 7.9% in last quarter, given the weak oil market, to stand at BD859 million as of Sep-2014.
Further, inflation numbers for Q4-14 suggested a marginal sequential increase of 0.35%. Whereas the most recent monthly inflation data suggested an increase of 2.1% y-o-y during February-15 and a sequential monthly increase of 0.2%. In terms of components, housing and utility costs that account for a lion’s share of consumer expenses saw a steep rise of 7.8% whereas prices of food and non-alcoholic beverages declined by 0.9% y-o-y.
On the monetary front, money supply (M2) during Q3-14 dropped by a marginal 0.2% Q-o-Q to record BD9.61 billion on the back of a decline of an equivalent 3.0% in demand deposits and currency outside banks; whereas, time and saving deposits increased by around 1.2%.