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Wednesday, December 7, 2022
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Wednesday, December 7, 2022
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    Innovative measures needed to overcome global economic issues

    Izah Azahari

    The global economy growth prospects have weakened significantly as of mid-2022 and is now projected to grow by only 3.1 per cent in 2022, down from the four-per-cent growth forecast in January 2022.

    Citing the World Economic Situation and Prospects (WESP) research, Brunei Institute of Leadership and Islamic Finance (BILIF) Chief Executive Officer Hajah Sufinah binti Haji Sahat noted this during the closing of the 14th Annual Brunei Darussalam Roundtable at The Empire Brunei.

    Hajah Sufinah said that global inflation is projected to increase to 6.7 per cent in 2022, twice the average of 2.9 per cent during 2010 to 2020, with sharp rises in food and energy prices. Gross domestic product (GDP) has also taken a huge hit, with Statista Research Department in 2022 stating that the world’s collective GDP had fallen by 3.4 per cent compared to the two per cent forecast released by World Bank Group in 2020. This has resulted in over USD2 trillion worth of lost economic output.

    These challenges also hold true for the local economy; according to the Centre for Strategic and Policy Studies, Brunei’s inflation rate reached its highest level in more than 25 years when it surged to 3.9 per cent year-on-year as of April 2022.

    Brunei Institute of Leadership and Islamic Finance Chief Executive Officer Hajah Sufinah binti Haji Sahat delivers her speech. PHOTO: BILIF

    “To emerge and recover from these global economic issues would require holistic considerations and innovative measures such as those discussed by our esteemed experts earlier, surrounding today’s expansive theme of ‘Moving Forward: Drivers of the New Economy”, she said.

    Touching on the insights shared by speakers and panellists yesterday, Hajah Sufinah said that they have heard about the changing regulatory landscape and how the Brunei Darussalam Central Bank (BDCB) is moving forward on navigating these challenges, including reprioritising regulatory efforts to mitigate potential risks to the nation’s financial sector, economy and people, while also stimulating financial development and innovation.

    “We were also presented with the sustainability of pensions and the extent to which countries have adjusted their pension schemes to match post-pandemic requirements, for which Brunei would also be required to follow suit accordingly,” she said.

    She shared that the speakers also touched on the potential for plant-based protein in contributing to the move to net zero, being that plant-based meat is arguably the fastest and most impactful investment in maintaining sustainable food demand; and the utilisation of artificial intelligence (AI) for investments, including its advantages which among others highlighted the ability to resemble human intelligence while having the capabilities to avoid information overload, having cheaper and faster computing, as well as the ability to leverage on human expertise via machine learning.

    Other panel sessions also exchanged views on environmental, social and governance (ESG) and sustainability, including the benefits and challenges of building on ESG-themed investment portfolios.

    “We also looked at the symbiotic relationship between ESG and Islamic finance, where we were given an overview of post-pandemic strategies that have emerged in this regard, as well as how investors can capture those opportunities.”

    Hajah Sufinah also shared that the final panel discussion shared points on the macroeconomic regime for Brunei and ASEAN countries, with the view that ASEAN economies are looking to benefit next year with the opening of the China market, following difficult conditions this year.

    “The outlook also seems to suggest that the ASEAN equity markets will remain challenging in a high inflation and high interest rates environment, although some equity markets in ASEAN may begin to recover from the recent sell-off.”

    Hajah Sufinah expressed hopes that the discussions have inspired participants to be a part of the resilient, sustainable and innovative key drivers of inclusive economic growth in the post COVID-19 era.

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