| Azlan Othman |
ROBUST domestic demand continues to drive growth in the sub-region, with infrastructure spending remaining strong in Brunei Darussalam, Indonesia, the Philippines, and Thailand but showing a decline in Malaysia, the Asia Development Bank (ADB) said in a supplement to its Asian Development Outlook 2018 Update released recently.
The growth forecast for Southeast Asia remains at 5.1 per cent for 2018, assuming robust consumption and infrastructure investment. Adjustments for Indonesia, Malaysia, and Thailand have lowered the 2019 outlook by 0.1 percentage points to 5.1 per cent. No GDP growth figures were available for Brunei Darussalam.
The Hengyi petrochemical plant on Pulau Muara Besar (PMB), scheduled for completion next year, is set to boost the country’s economic growth and provide more jobs for locals. Hengyi Industries Sdn Bhd is an international joint venture company incorporated in Brunei Darussalam to construct, own and operate Brunei Darussalam’s first world class oil refinery.
As the largest overseas investment by a private Chinese company, the anticipated construction of the refinery and aromatics cracker in Brunei marks a significant milestone for Hengyi Industries’ parent firm Zhejiang Hengyi Group, its website stated.
Work is also underway for the construction of the Temburong Bridge, which slated to be completed late next year. Covering a total distance of 30km and spanning the width of Brunei Bay, the Temburong Bridge Project will link Jalan Utama Mentiri in the Brunei-Muara District and Jalan Labu Estate in Temburong.
Once completed, the mammoth 30km-bridge will reduce travel time between the two districts to only 30 minutes, allowing commuters to bypass Limbang and the four immigration checkpoints along the current route.
However, the Asian Development Outlook 2018 Update also identified the escalating trade conflict between China and the United States as the largest downside risk, even after the leaders of both countries agreed to a 90-day truce precluding any new tariffs to allow time for bilateral negotiations – which also lends businesses a wider window for frontloading trade.
“The truce on trade tariffs agreed by the United States and the People’s Republic of China is very welcome but the unresolved conflict remains the main downside risk to economic prospects in the region,” ADB Chief Economist Yasuyuki Sawada said in a statement.
“That said, we are keeping our forecasts for the region’s growth unchanged for this year with some of the biggest economies continuing to hold up well.”
Local observers have forecasted that the dip in global oil prices is projected to impact Brunei’s economic growth.
Reuters reported yesterday that oil prices were near their lowest since the third quarter of 2017, having shed no less than 11 per cent last week. US crude was last unchanged at USD45.59 a barrel, while Brent dipped 19 cents to USD53.63.
AFP reported that oil ministers from leading OPEC nations said last Sunday that they expect prices to arrest their recent slide and rebalance early next year, when a deal on new production cuts takes effect. Oil prices have plunged more than 36 per cent since early October to trade at USD54 per barrel, due to fears of oversupply and weak global demand.