The Department of Economic Planning and Statistics (DEPS), Ministry of Finance and Economy (MoFE) projected Brunei Darussalam’s gross domestic product (GDP) growth this year to be between 0.8 and 1.6 per cent, with the oil and gas sector expected to grow at a rate of 0.5 per cent, and the non-oil and gas sector to grow between 1.1 to 2.9 per cent. This was driven by growth in the agriculture, forestry and fisheries sectors; industry sector; and services sector.
Minister at the Prime Minister’s Office and Minister of Finance and Economy II Yang Berhormat Dato Seri Setia Dr Awang Haji Mohd Amin Liew bin Abdullah highlighted this when deliberating the proposed budget for the financial year 2021-2022, during the third day of the 17th Legislative Council (LegCo) session yesterday.
International organisations including the ASEAN+3 Macroeconomic Research Office (AMRO), the Asian Development Bank (ADB); and the International Monetary Fund (IMF) projected positive growth for Brunei’s economy this year at 3.7 per cent, three per cent and 3.2 per cent.
A study by Brunei’s Centre for Strategic and Policy Studies (CSPS) projected that the national economy will grow at a 2.8 per-cent rate. These projections are due to production results from the downstream oil and gas industry for the Hengyi Oil Refinery and Petrochemical Plant Project in Pulau Muara Besar for Phase One, and also the Brunei Fertilizer Industries plant which will commence operations in the third quarter of this year.
Yang Berhormat Dato Seri Setia Dr Awang Haji Mohd Amin Liew said the global economy this year is projected to grow at 5.5 per cent, taking into account the strengthening of economic activities following the support of additional economic stimulus policies and vaccination programmes implemented worldwide. Meanwhile, economic growth in the Asian region, especially for Emerging and Developing Asia, is projected to grow at 8.3 per cent.
The IMF also predicts that global trade volume is expected to increase by around 8.1 per cent in 2021 compared to a negative rate of 9.6 per cent in 2020, in line with the projected global economic recovery.
Following the regulation of oil supplies from the Organization of the Petroleum Exporting Countries (OPEC) as well as the implementation of ongoing vaccination programmes around the world and the global economic recovery, the Energy Information Administration through a report this month (March 2021) predicted that Brent oil prices will increase on average to USD61 per barrel for 2021 compared to USD42 per barrel last year.
The increase in oil prices is driven by the increase in global consumption of petroleum and fuels on average from 92.2 million barrels per day in 2020 to 97.5 million barrels per day in 2021.
As for last year’s GDP growth, JPES said the country had recorded a 1.2-per-cent growth due to the increase in non-oil and gas sector by nine per cent (year-on-year) in line with the increase among others in the manufacturing sub-sector, mainly manufacturing of petroleum and chemical products (increased by 323.9 per cent); the communications sub-sector (increased by 15.9 per cent); the agriculture, forestry and fisheries sub–sector (increased by 11.7 per cent) due to the increase in the aquaculture industry in line with the increase in prawn production; and an increase in the production of cattle and broilers.
The wholesale and retail trade Sub-sector increased by 2.8 per cent following restrictions on outbound travel due to the COVID-19 outbreak. This has led to an increase in consumer demand for goods such as computer and telecommunication equipment; recreational goods; electrical appliances and lighting equipment; and pharmaceutical and medical items, as well as cosmetics and toiletries.
Meanwhile, the oil and gas sector recorded a 4.9-per-cent decline due to lower production of crude oil and natural gas.
Yang Berhormat Dato Seri Setia Dr Awang Haji Mohd Amin Liew said there are several new foreign direct investment (FDI) projects in the implementation phase and expected to be fully operational between 2021 to 2023. This includes Guangxi Ruian Logistics (Group) Company Ltd for operations, processing and marketing centres for global spices (Phase One), where imported spices will be given added value by using the ‘bruneihalal’ brand for overseas markets.
Other FDIs include the Pure Salmon Project to be managed and operated by 8F Asset Management (Singapore) for land-based Atlantic Salmon fish farming in the country; ISE Foods Inc for producing chicken eggs for export; EVYD Technology Sdn Bhd (Yidu Cloud) Global Hub in managing and preserving ‘big data’ for infectious disease control, with intentions to position Brunei Darussalam as its international headquarters; and Lautan Timur Product Sdn Bhd to develop oyster farming.
The minister said the Government of His Majesty Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah ibni Al-Marhum Sultan Haji Omar ‘Ali Saifuddien Sa’adul Khairi Waddien, Sultan and Yang Di-Pertuan of Brunei Darussalam constantly strives to attract more FDIs to generate economic spin-offs and employment opportunities for locals.