Brunei Economic Outlook
According to the latest available data, the economy shrank by 1.6% year on year in Q4, weakening from Q3’s 1.9% expansion. The oil and gas sector weighed on GDP growth, contracting 7.5% yoy in Q4, while the non-energy sector expanded at a robust 4.3%. Meanwhile, declining government consumption and fixed investment, as well as softening exports growth, outweighed stronger private spending growth. In 2023, the oil and gas sector is likely dampening economic growth further: In January, exports of oil and gas fell by 6.8% yoy in value terms (Q4: -0.7% yoy). More positively, softening price pressures in January–March from Q4 will have supported household spending. In other news, Brunei ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership on 16 May. It is set to come into force in mid-July, boding well for trade and foreign investment.
Brunei Inflation
Inflation dropped to 0.4% in March from 1.2% in February. In 2023, the average rate is forecast to remain well below 2022’s multi-decade high thanks to softer imported price pressures, government subsidies and the currency peg to the Singapore dollar. Volatility in commodity markets—particularly food prices—poses an upside risk.
This chart displays Economic Growth (GDP, annual variation in %) for Brunei from 2013 to 2022.