Brunei's economy is expected to rise by 3.5 percent next year

[ASEAN NOW Content Team]

 

Brunei's economic growth is expected to be 3.5 percent next year, up from three percent previously predicted by the Asian Development Bank (ADB).

Brunei's economic growth is lowered to 1.8 percent in the latest ADB update of its main economic book, the Asian Development Outlook (ADO) 2021, published on Wednesday (September 22), down from their earlier prediction of 2.5 percent in April this year.

 

Brunei's GDP in the first quarter of 2021 dropped by 1.4 percent year on year, according to the Asian Development Bank, due to losses in government spending, investments, and exports, which more than offset gains in private consumption.

Exports of products and services fell by 4.3 percent in volume, owing to a drop in mineral fuel sales.
Government consumption dropped 9.8% as a result of the Covid-19 epidemic, which impacted some government functions.
Investment declined by 5.7 percent, with both private and public sector capital spending falling.

 

Lower oil and gas production (down 3.1%), as well as natural gas manufacturing, contributed to the decrease in Q1 growth (down 11.4 per cent).

The output of services has improved slightly.
However, there was a widespread recovery that included wholesale and retail trade, restaurants, business services, information and communication, real estate, and personal services.

The resurgence in services indicates that the economy's effects of Covid-19 are fading.

 

Nonetheless, output in a number of other industries, including transportation, government services, and hotels, fell.
The update lowers its full-year growth forecast from the projection in ADO 2021 due to lower-than-expected gross domestic product (GDP) growth in Q1.

The prediction for 2022 is greater, owing to a predicted increase in production and investment at Hengyi Industries' refinery project and Brunei Fertilizer Industries' ammonia and urea production plans.

Inflation was 1.3 percent in the second quarter (Q2), lower than the peak of 2.5 percent in June 2020.

 

Except for transportation and restaurants and hotels, all components of the consumer price index (CPI) climbed at a slower rate.
Because of the substantial output gap, inflation is projected to moderate in the short term.

Although exports were down somewhat in the first four months of this year, they rebounded in May and June to show a 33.6 percent increase in the first half of 2021.
They are likely to rise for the remainder of 2021.

Higher global oil and liquefied natural gas prices this year and next, compared to 2020, will assist growth in goods exports, according to the ADB.

 

On the expected strengthening of local demand and inputs, such as mineral fuels for Hengyi's refinery, imports would climb in tandem with exports—their value increased by 169.8% from January to June.

As a result of all of this, the current account surplus this year will be lower than predicted in ADO 2021, although it will still be bigger than the surplus in 2020.

Meanwhile, the Asian Development Bank decreased its economic growth forecast for developing Asia for 2021, citing ongoing fears about the COVID-19 epidemic.

This year, the ADB predicts growth of 7.1 percent.
In April, the forecast was for 7.3 percent growth.

 

The growth forecast for 2022 has been increased from 5.3 percent to 5.4 percent.
New Covid-19 variations, local outbreaks that have resurfaced, the reintroduction of varied kinds of restrictions and lockdowns, and slow and unequal vaccine rollouts are all weighing on the region's prospects.

“As new varieties ignite outbreaks, developing Asia remains vulnerable to the Covid-19 pandemic, leading to further restrictions on migration in several economies,” stated ADB Acting Chief Economist Joseph Zveglich Jr.

 

“Policy measures should not only focus on containment and vaccination, but also on providing ongoing support to businesses and people, as well as reorienting sections of the economy to adapt to a ‘new normal' once the pandemic has passed, in order to jumpstart the recovery.”

Since the Delta version was discovered in April, the number of Covid-19 cases in emerging Asia has increased.
In May, the number of new cases each day reached a high of 430,000.