Azlan Othman
The International Monetary Fund (IMF) expects Brunei Darussalam’s economy to grow 3.3 per cent this year and 3.5 per cent next year.
Growth projection five years ahead has also shown that the Sultanate’s economy forecast to be 3.1 per cent in the year 2028. This was highlighted in IMF’s annual World Economic Outlook released in Washington on Tuesday.
The forecast came a week after the ASEAN+3 Regional Economic Outlook (AREO) 2023 said the Sultanate’s gross domestic product growth is forecast to be 2.8 per cent this year and 2.6 per cent next year. The IMF said the Philippine economy was forecast to expand 6.0 per cent, Cambodia ranked equal with Vietnam, with both economies projected to grow 5.8 per cent, 5.0 per cent for Indonesia, 4.5 per cent for Malaysia, 4.0 per cent for Laos, 3.4 per cent for Thailand, 2.6 per cent for Myanmar and 1.5 per cent for Singapore.
For the overall world economy, the baseline forecast is for growth to fall from 3.4 per cent in 2022 to 2.8 per cent this year, before settling at 3.0 per cent in 2024.
Advanced economies are expected to see an especially pronounced growth slowdown, from 2.7 per cent in 2022 to 1.3 per cent in 2023.
In a plausible alternative scenario with further financial sector stress, global growth declines to about 2.5 per cent in 2023 with advanced economic growth falling below one per cent.
Global headline inflation in the baseline is set to fall from 8.7 per cent in 2022 to 7.0 per cent in 2023 on the back of lower commodity prices but underlying (core) inflation is likely to decline more slowly. Inflation’s return to target is unlikely before 2025 in most cases.
“On the surface, the global economy appears poised for a gradual recovery from the powerful blows of the pandemic and the war in Ukraine,” the outlook said.
“China is rebounding strongly following the re-opening of its economy.
“Supply-chain disruptions are unwinding, while the dislocations to energy and food markets caused by the war are receding.”
At the same time, “the massive and synchronous tightening of monetary policy by most central banks should start to bear fruit, with inflation moving back toward its targets”, it added.
“Below the surface, however, turbulence is building, and the situation is quite fragile, as the recent bout of banking instability reminded us.”
IMF Economic Consultant Pierre-Olivier Gourinchas said downside risks dominated the world outlook and said the world is now entering a “tricky phase” with historically lacklustre growth, greater financial risks and persistent inflation.
“The fog around the world economic outlook has thickened,” he said.
The IMF’s latest projections also show an overall slowdown in medium-term growth forecasts.
Growth projections five years ahead have declined steadily from 4.6 per cent in 2011 to three per cent in 2023.
“Some of this decline reflects the growth slowdown of previously rapidly growing economies such as China or Korea. This is predictable: growth slows down as countries converge.
“But some of the more recent slowdown may also reflect more ominous forces,” the outlook added.
