Azlan Othman
The International Monetary Fund (IMF) forecasts the Sultanate’s gross domestic product (GDP) growth at 1.2 per cent this year (2022), 3.3 per cent next year (2023) and 3.2 per cent in 2024. This was according to its Regional Economic Outlook: Asia and the Pacific October 2022: Sailing into Headwinds, published on Thursday.
Higher fuel prices bring benefits to commodity exporters such as Brunei Darussalam as it has provided a windfall from higher export, revenue and bolstered private consumption.
Last month, IMF said for 2022, growth for the Sultanate is projected to rebound to 1.2 per cent, on the back of easing of mobility constraints and a positive term of trade shock due to surges in oil and gas prices.
The economy continues to diversify, with double-digit growth of the food/agriculture sector and a new fertiliser sector commencing production. Higher energy prices would further improve the terms of trade and restore fiscal positions in the short term, while partially contributing to build the buffers needed to ensure stronger intergenerational equity.
In Thursday’s report, IMF also said growth in the Asia and Pacific region is expected to slow down in 2022 and 2023, reflecting headwinds from global financial tightening, the war in Ukraine, and the sharp and uncharacteristic slowdown of the Chinese economy. The challenging conjuncture poses difficult trade-offs for policymakers.
“We have cut growth forecasts for Asia and the Pacific to four per cent this year and 4.3 per cent next year – down by 0.9 and 0.8 percentage points, respectively, compared to the April World Economic Outlook – which are well below the 5.5 per cent average over the last two decades.
Despite this, Asia remains a relative bright spot in an increasingly dimming global economy,” noted Director of the IMF’s Asia-Pacific Department Krishna Srinivasan.
Meanwhile, the recovery in ASEAN is expected to be strong in 2022, because of robust consumption, services, and exports in the first half of the year, supported by high vaccination rates, border re-openings, and the gradual removal of pandemic restrictions.
Growth is projected at slightly over five per cent in Cambodia, Indonesia, and Malaysia, and 6.5 per cent in the Philippines. Vietnam is benefitting additionally from trade diversion from China and is expected to grow at seven per cent.
After a precipitous fall in output of almost 18 per cent in 2021 amid a political and humanitarian crisis, Myanmar is expected to begin a moderate recovery, with growth of two per cent in 2022 and rising to 3.3 per cent in 2023.
The outlook for Laos remains challenging, given elevated debt vulnerabilities and low reserves, resulting in foreign exchange shortages that hurt the poor and hamper the recovery.
The growth momentum is expected to moderate somewhat in 2023 for Indonesia, Malaysia, the Philippines, Singapore, and Vietnam.
This reflects weaker external demand, supply chain disruptions, a pivot to macro policy normalisation to contain price pressures and manage risks, and tighter financial conditions.
Cambodia and Thailand will instead expand faster as the recovery in foreign tourism is now expected to be more vigorous.
