Bahrain Infrastructure Annual Report 2008

The Kingdom of Bahrain is an archipelago of almost 40 islands and is centrally located between the Persian Gulf countries. The island nation was among the first in the Gulf to export oil. However, its oil resources are fast depleting and could run out in a couple of decades. BMI forecasts that the construction industry in the country will grow at an average rate of 4.9% during 2008-12.

Bahrain relies heavily on the primary sector for output and employment. The country's economy is primarily fuelled by oil and gleaned substantial benefits from the surge in oil prices. Petroleum production and refining account for over 60% of Bahrain's export receipts, over 70% of government revenues, and 11% of GDP. The financial and construction sector are the other important sectors in the nation's economy. Bahrain has been actively pursuing the diversification and privatisation of its economy to reduce the country's dependence on oil. Some of the major infrastructural projects being undertaken in the country include the US$2.6bn North Bahrain New Towns Project, the US$2.5bn waterfront metropolis by the Bahrain Bay Development, and the US$1.5bn Amwaj Islands project.

Unemployment, especially among Bahraini youth and depletion of oil resources are the two major problems being faced by the island state. It has been making concerted efforts to transform itself into a modern industrial economy and services hub. Persistent tensions between the Sunni-dominated political elite and the generally less well-off Shia majority are another area of concern for the country.

However, Bahrain's economy is expected to grow at an average annual rate of 5.38% during 2008-2012.

BMI forecasts that the Bahraini construction sector is likely to log an average rate of 4.9% over the same period. Further, it is expected to reach a value of BHD308.19mn (US$819.65mn) in 2012 and contribute 3.6% to the country's GDP.