Bahrain’s real gross domestic product (GDP) expanded 4.3 per cent in the second quarter, said a report, adding that the figures showed the economy had returned to a solid growth path after last year's unrest.

'Bahrain's balanced fiscal and monetary policy helped economic growth and fiscal stability, enabling the economy to face the challenges and local disturbances and foreign financial crises that remain,' said the report from the kingdom’s Central Informatics Organisation (CIO).

'By containing the negative effects of the regrettable events of February 2011, interest has returned to the positive aspects of the local economy... The attention that was focused on the country in the past year has softened and things have returned to normal.'

Gross domestic product, adjusted for inflation, dropped 1.3 per cent quarter-on-quarter in April-June compared with 0.9 per cent growth in the previous quarter, the figures from the CIO showed.

The quarterly decline is the first since a 6.6 per cent slump in the first three months of 2011.

Output in the hydrocarbon sector, which accounts for almost a third of Bahrain's roughly $28 billion economy, fell 7.7 per cent quarter-on-quarter during April-June after a 13.9 per cent slide in the previous quarter, the data showed.

Other sectors directly dependent on investor confidence also slowed. Financial corporations' output decreased 1.2 per cent, worse than a 0.4 per cent fall in the first quarter. The construction sector shrank 0.7 per cent quarter-on-quarter after a 10.2 per cent jump in January-March.

'Real growth was expected to be strong in the second quarter of 2012,' noted Monica Malik, chief economist at investment bank EFG-Hermes in Dubai.

'We do see the overall economic activity improving with increased investment and government spending, although we expect the rate to slow in the second half of 2012.' – TradeArabia News Service