Bahrain overhauls its 2030 economic blueprint

Bahrain is revising its economic growth strategy to reflect a decline in the importance of financial services and construction.

Both sectors acted as valuable drivers of growth in recent years as the kingdom sought to accelerate its economic diversification away from oil.

Adjustments to the strategy will also take account of a slowdown in the rate of growth of government spending.

The new strategy will also reflect changes in employment patterns that are expected to lead to an increasing shift in jobs growth from expatriates to Bahrainis. Growth of 29 per cent is predicted in the Bahraini workforce over the next decade, according to the latest economic quarterly report from the Bahrain Economic Development Board (EDB).

Governments across the Gulf are tweaking ambitious strategies for expansion conceived before the global crisis. Abu Dhabi and Dubai have both indicated they will revise their plans.

Bahrain launched its economic vision 2030 last year with a goal to double real income for Bahraini households.

Officials say the overall plan remains intact, with only the road map on how to achieve its goals being revised.

Bahrain's aim to establish itself as a regional financial services centre suffered a setback during the crisis. As elsewhere in the Gulf, Bahrain's economy was hurt by a sharp drop in oil prices, a slowdown in the construction industry and troubles within the financial sector.

The EDB now accepts that those two sectors are likely to make a more modest contribution to growth in the next decade.

Manufacturing, transport, information communication technology, services and tourism will become more important drivers, the board said in the report. The oil sector's contribution will also rise as investments in the onshore oil and gas extraction industry lead to higher oil output.

Bahrain's future economic outlook will also be affected by lower state spending as the government seeks to restore sustainable budget surpluses. Next year and in years to come, public expenditure will be growing more slowly than nominal GDP, the EDB says.

tarnold@thenational.ae