Brunei economy continues to grow by 2.8pc in Q2 2020

In Q2 2020, Brunei Darussalam’s gross domestic product (GDP) at current prices was estimated at BND4 billion compared to BND4.8 billion in Q2 2019.

The Oil & Gas sector, comprising oil and gas mining and manufacturing of liquefied natural gas (LNG), was valued at BND1.9 billion which accounted for 46.8 per cent of the total gross value added (GVA). Meanwhile, the Non-Oil & Gas sector, which now includes downstream activities such as the manufacturing of petroleum and chemical products, contributed 53.2 per cent with a GVA of BND 2.1 billion.

At constant prices, GDP recorded a positive growth of 2.8 per cent year-on-year in Q2 2020. The growth was contributed by the increase in the Non-Oil & Gas sector by 8.1 per cent.

Meanwhile, the Oil & Gas sector recorded a decrease by 1.3 per cent.

The growth in the Non-Oil & Gas sector was mainly due to the downstream activities including a new production of petroleum and chemical products, with a GVA of BND294.9 million .

Meanwhile, the decline in the Oil & Gas sector was mainly due to the decrease in the LNG production from 984,343 MMBtu per day (in Q2 2019) to 910,974 MMbtu per day (in Q2 2020).

In addition, natural gas production also recorded a decrease from 34.34 million cubic metres per day to 34.30 million cubic metres per day in the same period of time.

By kind of economic activity, the positive growth year-on-year in Q2 2020 was due to an increase in the Industry sector by 6.6 per cent following the new production of petroleum and chemical products.

However, the Services Sector decreased by 3.6 per cent due to the decrease in the subsectors such as education, government services, and air transport.

A contraction in the Education Subsector by 18.4 per cent was in line with the decrease in government and private education services. On the other hand, the COVID-19 outbreak has led to a decline in some service activities such as Air Transport Subsector by 93.1 per cent due to reduced travel operations.

The outbreak of the pandemic also affected services such as hotel and restaurant, where during the second quarter, the government implemented several preventive measures to reduce the risk of transmission such as barring the entry of tourists into the country, prohibiting from serving food in eateries and limiting the number of customers allowed to dine in at one time.

Although the overall Services sector recoded a decrease, several subsectors under this sector have showed an increase such as Finance (11.8 per cent), Water Transport (33.2 per cent), Real Estate & Property Ownership (2.4 per cent), Communication (2.5 per cent) and Wholesale & Retail Trade ( 0.3 per cent).

The growth in the Finance subsector was attributed to the increase in investment income related to banking services activities. Meanwhile, the increase in the Wholesale & Retail Trade subsector was in line with the travel ban from exiting the country due to the spread of COVID-19 infections.

The Agriculture, Forestry & Fishery Sector also recorded a decrease by 4.4 per cent following the decrease in the production of fishery, livestock and poultry, and forestry. On the positive side, the vegetables, fruits and other agriculture subsector expanded by 7.6 per cent.

By expenditure approach, the GDP growth was attributed to an increase in the external demand (exports of goods and services) by 16. 5 per cent, in line with the new exports of petroleum and chemical products.

Domestic demand registered a negative growth of 15.9 per cent due to a decrease in capital expenditure and government final consumption expenditure. However, this was moderated by the increase in the household final consumption expenditure by 2.7 per cent.

GDP is a measure of the total value of goods and services produced in a particular period after deducting the cost of goods and services used up in the process of production.

The GDP full report for Q2 2020 is available from the Department of Economic Planning and Statistics website at www.deps.gov.bn.