The oil sector of the economy shrank 14.7% from a year earlier in the first quarter of 2018, impacted by a one-off maintenance-related reduction in oil production. Although the Kingdom announced in April that it had made its biggest oil discovery in decades, it is not clear how much of the oil can be extracted commercially. Official figures showed that the economy shrank 1.2% year-on-year in the first quarter of 2018, after a downwardly revised 2.3% growth in the previous quarter. It was the first contraction of the Bahraini economy since the last quarter of 2011. Non-oil growth expanded by 1.9%, down from 3.8% in the fourth quarter of 2017, and 4.7% in the first quarter of 2017. The country’s Economic Development Board said in August 2018 that it expected the non-oil economy to grow 4.3% in 2018 as a whole, leading to overall growth of 3.4%. It said economic diversification and fiscal consolidation efforts would help transition to the next stage and create a broad revenue base across the non-oil economy. Expansion in the construction sector has accelerated markedly to 6.7% during the first three months of 2018. Construction has always been an important driver of growth in other non-oil sectors and the renewed momentum in the first quarter suggests sectors such as manufacturing, trade, real estate and financial services are likely to benefit over the course of the year.