Bahrain should achieve economic growth of 2.4 per cent this year and that should rise to 2.9 per cent next year, said investment bank Merrill Lynch in its outlook for 2013.

That is against a rise of global growth from 3.1 per cent to 3.2 per cent next year but at a time when the bank is predicting a dip in US growth from 2.1 per cent to 1.5 per cent and a continued slight recession in the euro zone.

Bahrain and much of the region were positive because of the strength of oil and continuing diversification, Johannes Jooste, Merrill Lynch head of strategy for Europe, the Middle East and Africa, was quoted as saying in our sister publication, the Gulf Daily News.

But he said that investors across the globe should now look to disinvest in bond markets and look to equity markets for growth in the medium term.

"Investors should position for the great rotation out of fixed income and into equities that is likely to begin in 2013,” he said.

"The economic and market outlook for the coming year is brighter than in 2012. There is increased evidence of the Federal Reserve's progress in rekindling the US economy and even a gradual euro zone recovery in prospect during the second half.

"In addition, in China growth is forecast to improve slightly. This leads us to favour equities over bonds in 2013. The notable valuation gap between the two asset classes, now at its most favourable level for stocks in over 25 years, adds to our conviction here," he added. – TradeArabia News Service