BRUNEI Darussalam is projected to reach a 2.5 per cent economic growth with an inflation rate at 0.7 per cent this year, compared to the GDP growth of 5.1 per cent and inflation rate of 0.2 per cent last year, a report from the United Nations (UN) said yesterday.
The unemployment rate for this year stands at around four per cent, almost similar to that of 2014.
The International Monetary Fund (IMF) late last year said the GDP growth should rise to five-and-a-half per cent in 2014, and projected the Sultanate’s GDP to be 3.0 per cent in 2015 and 3.4 per cent in 2016.
UN in its report noted growth in Asia-Pacific developing economies will pick up moderately in 2015. Prospects for growth would be better if supported by much-needed structural reforms, and could also be boosted by lower oil prices, which is an opportunity to mobilise resources for inclusive and sustainable development.
The steep decline in oil prices in recent months may be the start of a longer-term trend. It will have a significant, yet varying impact across the region.
The year-end update estimates that for energy-importing countries, a $10 per barrel fall in the oil price in 2015 would translate into an increase in GDP growth of up to 0.5 percentage points.
Declining global oil prices are a valuable opportunity for Asia-Pacific economies to reduce fuel subsidies that account for a large share of national budgets in many countries in the region. Regressive fossil fuel subsidies more often benefit the rich and have little impact on reducing poverty.
The savings from a cut in these could be better invested into more productive and inclusive development, the report added.
UN Economic and Social Commission of Asia and the Pacific (ESCAP) estimated that savings from energy subsidies could, for example, finance the provision of income security to all elderly and persons with disabilities as well as universal access to health and education in Indonesia, Malaysia, the Philippines and Thailand.
“This is a particularly critical and opportune time to decrease subsidies,” ESCAP Executive Secretary Dr Shamshad Akhtar said, noting that this would not only reduce budgetary strains but also prepare governments for the near future when global financing may be even more challenging to secure.
“Reducing subsidies can raise significant public financial resources forproductive investment in the region and could make needed funds available for financing sustainable development,” Dr Shamshad Akhtar added.