Economic growth in Bahrain is expected to increase to 4-5 percent this year amid increases in crude oil production, manufacturing and government spending, a new report said on Tuesday. According to the Economic Development Board (EDB) report, GDP growth is set to rebound towards historic levels. While a fall in private sector demand and oversupply of commercial properties has slowed construction, government spending is projected to compensate and fuel construction for infrastructure, social housing and other social spending projects such as schools and hospitals, the report added. It estimated that Bahrain’s annual real output continued to grow during 2011, expanding by 2.2 percent. This exceeded the previous estimate of 1.5 percent growth as the economy boosted was by a faster than expected recovery in the second half of the year. The report indicated that after a sharp fall in the output in Q1 2011 due to unrest, output returned to its previous level in Q3 and grew by 3.2 percent in Q4 compared to the same period a year earlier. The fastest growing sector in 2011 was transport and communication at 11 percent, the report said. It added that the hotels and restaurants sector was hardest hit in 2011, although it showed \"significant recovery\" following a difficult first half to the year. Kamal bin Ahmed, minister of transportation and acting chief executive of the Bahrain Economic Development Board said: “These figures are a positive signal that Bahrain’s economy is rebounding from the impact of last year and that government measures to boost growth are taking effect. \"We are confident that as the recovery continues, the economy will return towards its normal growth levels.” During 2011, the EDB attracted over $300m in new foreign investment, primarily in banking and manufacturing, with more than 20 new companies establishing operations in Bahrain, including German chemical giant BASF, Geneva-based asset managers Notz Stucki, Canara Bank and JBF Industries from India, and global law firm DLA Piper.