| James Kon |
BRUNEI’S gross domestic product (GDP) growth is expected to pick up to 5.8 per cent in 2019, according to global information provider IHS Markit.
This was revealed by Executive Director and Asia-Pacific Chief Economist at IHS Markit Rajiv Biswas during his presentation at the 48th ASEAN Banking Council Meeting at The Empire Hotel & Country Club yesterday.
“Exports are projected to accelerate in 2018 as the improvement in oil prices incentivise increased production levels despite the ongoing refurbishment programme of the country’s oil production facilities,” said Biswas. “Construction will also support growth where the government has increased the pace of construction activity of the Pulau Muara Besar complex to have it ready for a major foreign finance oil refinery project in 2018. Several road and bridge projects are also under construction and due for completion over the next couple of years.”
Speaking on the Brunei hydrocarbon sector, he said, “The hydrocarbon sector will remain the main source of growth in the medium to long term. Oil and gas extraction have made Brunei one of the richest nations in Asia. However, to sustain more growth in the long term, Brunei will have to foster the development of other high value added manufacturing and services sectors.”
Speaking on diversification, he said, “Even though hydrocarbon reserves are expected to last several decades, they are slowly depleting which has created the need to shift the economy’s focus away from its near exclusive reliance on the oil and gas sectors.
“The biggest promise lies in the improvement of the downstream hydrocarbon industries such as the petrochemicals and refineries. An oil refinery and aromatics cracker complex project planned for Pulau Muara Besar will develop Brunei’s downstream petrochemicals processing industry. As the refinery and petrochemical clusters come into operation, more of the value added from the oil and gas extracted in Brunei could be retained in the domestic economy,” he added.
Biswas said the Asia Pacific (APAC) region is expected to remain the fastest growing region of the world over the next decade, contributing around 50 per cent of the total increase in world GDP between 2018 and 2028.
China, India and ASEAN will be the key growth engines of Asia-Pacific economic growth over the next decade. ASEAN will be one of the most dynamic regions of the global economy, growing at a pace of five per cent per year in 2019-2020. Rapid ASEAN economic growth will be buoyed by strong growth in consumer spending and infrastructure investment, as well as fast-growing inter-ASEAN trade.
ASEAN’s banking sector is expected to be a clear winner from ASEAN’s rapid GDP growth rate, which will drive strong growth in demand for financial services, including retail banking, corporate banking, trade credit and wealth management.