Brunei Darussalam’s economy is forecast to be strong and able to record growth despite the COVID-19 pandemic. This is supported by development in various industries and in the agriculture sector in the Sultanate which have shown positive growth over the past two to three years.
This was highlighted by Minister at the Prime Minister’s Office and Minister of Finance and Economy II Dato Seri Setia Dr Awang Haji Mohd Amin Liew bin Abdullah during a press conference in mid-April this year.
In the same month, the International Monetary Fund (IMF) World Economic Outlook report predicted Brunei Darussalam’s gross domestic product (GDP) growth to be 1.3 per cent this year. In its forecast earlier this year, IMF said for 2020, it has projected the Sultanate’s GDP growth at 4.7 per cent.
“As a result of the pandemic, the global economy is projected to contract sharply by minus three per cent in 2020, much worse than during the 2008-09 financial crisis.”
“The IMF commented that if the COVID-19 crisis drags on, the potential impact on the global economy is worse than what they have forecast. In the case of Brunei, we are no exception,” Dato Seri Setia Dr Awang Haji Mohd Amin Liew said, adding that last year, for comparison, Brunei recorded a 3.9 per cent GDP growth, the strongest in 13 years.
“We see growth in both the oil and gas sector and sectors out of it. Based on our internal assessment, if we continue the trend in this country (with the exception of few in the tourism sector), many can still continue to operate and people can still go to office and work. We are quite lucky compared to other countries,” he said, referring to the impact of COVID-19 on the economy.
The minister added, “Based on that assumption, we foresee our economy growth to be strong. Last year, we recorded a 3.9 per cent growth and this year, we will see a positive growth again.”
The minister said the prediction is supported by the growth in several industries, emphasising on the ‘Buy Local Produce’ campaign that ensures businesses and farmers’ income are not affected.
“This initiative will also ensure price stability of agricultural products, such as vegetables and fruits, and promote the continuous cultivation of agricultural products,” he said.
The IMF also projected Brunei Darussalam’s GDP growth to be 3.5 per cent next year by taking into account production of the downstream oil and gas industry, notably the Oil and Petrochemical Plant Project in Pulau Muara Besar (PMB) and the Brunei Fertilizer Industries (BFI) plant.
Meanwhile, the Asian Development Bank (ADB) in mid-June projected Brunei Darussalam’s GDP to be 1.4 per cent this year, revised down from two per cent in its previous project after taking into account the effects of measures in place to contain the novel coronavirus on economic activities.
However, the ADB’s Asian Development Outlook (ADO) Supplement report showed the Sultanate’s economic growth is set to bounce back to three per cent next year.
During this year’s Legislative Council (LegCo) session, it was highlighted that the proposed budget for Financial Year 2020/2021 is BND5.86 billion. The estimated government revenue for the Financial Year 2020/2021 is projected to be BND4.05 billion, in which revenues from the oil and gas sector are estimated at BND2.91 billion, while the remaining sectors at BND1.14 billion. As such, the national budget for the Financial Year 2020/2021 is expected to experience a deficit of BND1.81 billion.
However, the session did not consider the current COVID-19 health crisis as well as the plunging oil prices.
As such, the country’s economic position will likely to be affected and government revenue lower than the estimated amount, which could lead to a bigger deficit.