Brunei Economic Outlook
According to the latest available data, the economy narrowly avoided an eighth consecutive quarterly contraction in Q3: Annual GDP grew 0.9%. The expansion was driven by the non-oil and gas sector, which improved thanks to the opening of Brunei’s borders in August and robust output of diesel and chemical products. Nevertheless, the aging oil and gas sector continued to weigh on growth. Turning to Q4, growth likely remained stable. Following October’s slump, November’s exports rebounded thanks to higher volume of crude exports. Meanwhile, accelerating imports growth in October–November points to resilient domestic activity. In addition, the non-oil and gas sector likely continued to drive economic growth: Expansions in exports of other petroleum-derived chemicals remained robust in the first two months of the quarter.
Inflation rebounded to 3.3% in December from 3.1% in November. Although the commodity price boom brought the headline rate to a multi-decade high in 2022, the currency peg to the Singapore dollar and public aid capped price growth. In 2023, inflation should cool on softer commodity prices and government subsidies.