MANAMA, 19 August 2007 — In the backdrop of robust economic growth, Bahrain’s total volume of trade surged to BD7.7 billion at the end of 2006, an increase of 15.3 percent and 13.9 percent in exports and imports respectively compared with the 2005 figures, an official report showed.

The Central Bank of Bahrain (CBB), in its annual report for 2006, said that the value of total exports increased from BD3.77 billion million in 2005 to BD4.35 billion in 2006 or by 15.3 percent. This increase was primarily due to a rise in the value of oil exports by 18.4 percent from BD2.93 billion in 2005 to BD3.47 billion in 2006. Although oil exports constituted the highest share of total exports (accounted for 77.7 percent), growth in the value of non-oil exports was much more substantial, growing by 4.7 percent in 2006 compared to 13.9 percent for 2005.

The value of total imports increased from BD2.99 billion in 2005 to BD3.362 billion in 2006 or by 12.6 percent. Oil imports increased from BD1.57 billion in 2005 to BD1.84 billion in 2006, or by 17.6 percent.

This was mirrored in the growth of the value of non-oil imports, which increased by 7 percent in 2006, showing an increase of demand resulting from escalating levels of private consumption and investment.

The report said Bahrain enjoyed robust economic performance in 2006 as gross domestic product (GDP) grew by 19.7 percent at current prices and 7.8 percent at constant prices in 2005.

The strong rate of growth continued into 2006 rising from a net surplus of BD60 million or 1.4 percent of GDP in 2004 to BD257.3 million or 5.1 percent of GDP for the year 2005. Preliminary estimates for the year 2006 showed a government surplus of approximately 1 percent. In 2006, despite the impact of an expansion in domestic demand, Bahrain achieved strong economic growth in a relatively low inflation environment.

The reported consumer price index (CPI) increased from 107.1 in 2005 to 109.3 in 2006, a rise of 2.1 percent. Although Bahrain’s growth rates have historically tended to follow international oil prices, the non-oil sector, which is estimated to have had a real growth of 8 percent in 2006, has been a significant component of the overall growth in Bahrain economy.

Bahrain’s trade balance surplus increased from BD781.4 million in 2005 to BD984.8 million in 2006.

Provisional balance of payments data showed a current account surplus of BD721.3 million for 2006.

Bahrain’s foreign currency debt rating was upgraded from an A- with a positive outlook to an A (stable) by Standard & Poor’s (S&P), and had an improvement from an A- (stable) to an A- (positive) by Fitch.

Bahrain is recognized as a “Front Runner” by UNCTAD for its inward foreign direct investment (FDI) performance, signifying high FDI potential and performance. In the World Investment Report for 2006, Bahrain ranked 22nd for its inward FDI performance. In December 2006, Bahrain was also awarded the title of “Middle East City of the Future” by Financial Times business magazine.

The two-year award marks Bahrain’s specialization in FDI and strong economic performance across the board. The Kingdom also claimed two other awards for “Best Human Resources” and “Best FDI Promotion Strategy” while claiming runner up spots for four additional categories of “Best Economic Potential”, “Best Quality of Life for Expatriates”, “Most Secure”, and “Best Telecoms and Transport”.