Bahrain’s hydrocarbon economic sector shrank 14.7 per cent from a year earlier.
Bahrain’s economy dropped on an annual basis in Q1 2018 for the first time in at least seven years as oil production sags, reported Reuters.
The data from the official statics agency have raised increase concern about the health of Bahrain’s economy as it struggles with a current account gap and a large state budget deficit, which have dragged down prices of its international bonds and pushed the dinar to a 17-year low against the US dollar late last month.
The Q1 data underlines the challenges that Bahrain faces as it tries to revive its economy and state revenues.
Though Bahrain announced that it had discovered largest oil reserves in decades last April, it is not clear how much of the oil can be extracted commercially.
Non-oil sector of the economy expanded a modest 1.9 per cent from a year earlier in Q1, the manufacturing and construction sectors grew on the back of rising aluminium exports and infrastructure projects partly funded with aid from Bahrain’s neighbours.