Brunei's GDP is expected to rise by 4.1% this year

[ASEAN NOW Content Team]

 

Brunei Darussalam's economy is expected to increase at a rate of 4.1 percent this year, owing to strong oil and gas prices, a continuing global recovery, and a low base effect. The growth rate of the gross domestic product (GDP) is expected to reach 2.3 percent next year.

The Asean+3 Macroeconomic Research Office (AMRO) emphasised this in its annual Asean+3 Regional Economic Outlook (AREO) report released on Tuesday.

According to the research, the Sultanate's economy has been declining for four quarters in a row year-over-year (y-o-y) through the third quarter of 2021.
In the first nine months of 2021, real GDP fell by 1.7% y-o-y, owing primarily to a drop in the oil and gas industry.

 

The sector's ability to recover from unanticipated deferment of well, reservoir, and facilities management activities was hampered by turnaround efforts and a constrained onsite personnel due to Covid-19.

Finance, communication, health services, and food and beverage manufacturing all contributed to the non-oil and gas sector's good performance in Q3 2021.

Domestic demand was the main driver of growth in the non-oil and gas industry.

Retail sales did strongly in the first nine months of 2021, according to the AMRO research, as restrictions on abroad travel encouraged an increase in home consumption. However, as movement restriction mandates went into effect in Q3 2021, it fell by 5.2 percent.

 

With the removal of containment measures in Q4 2021, the economy began to recover.
As a result, during the entire year of 2021, real GDP increased by 0.2 percent.

AMRO forecasts Asean+3 growth of 4.7 percent this year and 4.6 percent in 2023, with Asean growth of 5.1 and 5.2 percent.
The region's high immunisation rates, which should help mitigate Covid-19's health hazards, are supporting the region's growth prospects.

 

"As we approach 2022, it appears that the region has made some progress in its lengthy battle against the virus, and we can now look forward to a wider opening-up and a solid economic recovery," AMRO chief economist Dr Hoe Ee Khor said.

Ukraine's unrest is posing a new threat to the outlook.
Higher energy prices are already being felt in the region as a result of it.
While the economies of the Asean+3 have limited direct exposure, they will not be spared if the crisis continues.

 

The economic consequences, including disrupted worldwide supply chains, greater global inflation, and weaker global GDP, will surely harm Asean+3 exports and growth. Inflationary pressures in the United States (US) have pushed the Federal Reserve to begin tightening monetary policy, although it is unclear how aggressively it will do so.

Interest rates, capital outflows, and financial market volatility in the region would all be affected by a faster-than-expected rate hike by the Fed and the resulting tightening of global financial conditions.