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03-09-12

Bahrain's economy slows in Q2 as 2011's unrest weighs

(MENAFN) Official data showed that Bahrain's gross domestic product (GDP) contracted during the second quarter of this year, after moderate growth in the first quarter, indicating that last year's political unrest continued to weigh on the Gulf island Kingdom. According to Central Informatics Organization, Bahrain's economy, adjusted for inflation, fell by 1.3 percent quarter-on-quarter, compared with 0.9 percent growth in the first three months of 2012. Year-on-year, real GDP recorded a 4.3 percent growth in the second quarter after a 5.9 percent jump in the first quarter, the statistics office said. The figures showed the economy had bounced back to a solid growth path after last year's uprising, which temporarily forced banks and shops to close and triggered an outflow of funds. However, continued political unrest in Bahrain, with almost daily clashes between young activists and riot police, still casts shadow on the economy. Oil and gas sector, which accounts for almost a third of Bahrain's roughly USD28 billion economy, slipped by 7.7 percent quarter-on-quarter during April-June after a 13.9 percent fall in the previous quarter, official figures showed. The financial sector fell by 1.2 percent, after it shrank 0.4 percent in the first quarter, while the construction sector dropped 0.7 percent following a 10.2 percent jump in the first quarter. Heavy government spending has helped to offset weaker private sector confidence since the uprising. The government plans to spend a record USD9.8 billion in 2012 after boosting its original plan by nearly 19 percent last September.

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