Bahrain’s economic growth increased sharply in the second quarter of 2018 to an annual rate of 2.4 per cent.

The data published in the Bahrain Economic Quarterly Report (BEQ), produced by the Bahrain Economic Development Board (EDB), shows that growth accelerated from the previous quarter.

According to the quarterly report, Bahrain’s non-oil GDP expanded by an annual 2.8 per cent in the second quarter, driven by a 6.7 per cent increase in construction and a 4.5 per cent rise in manufacturing. The construction sector growth reflects the total sum of infrastructure projects in Bahrain reaching $87.3bn in mid-September, according to regional projects tracker MEED Projects.

The total value of foreign direct investment is also increasing. The total value of projects facilitated by the EDB in the first nine months of 2018 was 138 per cent higher than a year earlier. Of the companies attracted by the EDB in the first three quarters of 2018, 31 out of the 76 companies fall in the manufacturing sector.

Bahrain’s economy is undergoing a series of major reforms following the signing of a $10bn financial aid agreement with Saudi Arabia, the UAE and Kuwait.

The agreement will support Bahrain’s fiscal balance programme, which aims to eliminate the country’s budget deficit by 2022 by delivering annual fiscal savings of BD800m ($2.1bn).

In October, Bahrain’s parliament approved the introduction of value-added tax (VAT) from 1 January 2019.