Brunei’s 2021 GDP falls at fastest pace in five years

BANDAR SERI BEGAWAN – The Brunei financial system suffered its largest contraction in 5 years, closing out 2021 with a 1.6 % annual damaging development charge as oil and fuel manufacturing woes continued to impede restoration.

In its worst financial recession because the oil worth crash in 2016, Brunei recorded declining gross home product (GDP) development in all 4 quarters of 2021.

Official figures confirmed that the financial system shrank 1.4 per cent within the last quarter of 2021, amid COVID-19 restrictions that affected some financial sectors.

The hydrocarbon sector maintained its poor efficiency from 2020, falling 4.8 % final 12 months regardless of rising oil costs, which climbed 89.7 % to a median of US$82 a barrel in This autumn 2021.

Accounting for 50.4 % of the This autumn GDP, the oil and fuel sector had been dealing with lowering output and was cited as the principle cause for Brunei’s weak financial system.

“The discount in crude oil and pure fuel manufacturing was on account of shutdown turnaround actions,” the Division of Financial Planning and Statistics (DEPS) mentioned in a press assertion issued final weekend.

It added that the decline in liquefied pure fuel manufacturing was on account of restricted fuel provide and upkeep actions at one of many LNG vegetation.

Suppose tank Centre for Strategic and Coverage Research beforehand mentioned manpower shortages in addition to ageing oil and fuel fields had contributed to the cutting down of oil and fuel manufacturing in 2021.

Oil output decreased from 105,000 barrels a day in This autumn 2020 to 103,400 barrels a day in This autumn 2021.

Earlier in Q3 2021, Brunei’s crude oil manufacturing slumped to a file low of 97,100 barrels a day following COVID-19 disruptions.

LNG output additionally tumbled from 901,100 million British thermal items per day (MMBtu/d) in This autumn 2020 to 774,100MMBtu/d in the identical interval final 12 months.

Whereas the power sector has taken a success over the previous two years, the federal government had mentioned it deliberate to ramp up oil and fuel manufacturing of 300,000 barrels of oil equal a day this 12 months.

Analysts projected the Brunei financial system to bounce again from recession in 2022 as greater power costs are anticipated to spice up development within the hydrocarbon sector and most COVID management measures have been lifted.

The improved financial outlook was additionally attributed to the downstream oil and fuel sector, which is about to increase with state-owned Brunei Fertilizer Industries beginning its ammonia and urea manufacturing in Q1.

Shock income acquire for companies sector

The non-oil and fuel sector – together with downstream oil and fuel actions – maintained its constructive momentum with a development of 1.4 % year-on-year within the final quarter of 2021.

The expansion was spurred by the companies sector, which sprang a shock 2.1 % rise in This autumn 2021, when Brunei tightened COVID curbs throughout its second wave of infections.

Brunei started easing restrictions on November 19, together with permitting dine-ins at eating places and companies have been in a position to function at half of their typical capability.

General, the non-oil and fuel sector reported an annual GDP development of two % final 12 months.

Nonetheless, the downstream sector skilled its third consecutive quarter of income losses with a 2.5 % lower in This autumn – a stark reversal as downstream actions have been the most important driver of Brunei’s financial development in 2020.

Buoyed by the return of extra travellers, the air transport sub-sector noticed the best development of 83.6 % amongst all sectors within the final quarter of 2021.

Different sub-sectors in constructive territory have been land transport (45.6%), different transport companies (11.6%), finance (4.7%), authorities companies (4.6%), enterprise companies (3.1%) and well being (2.6%).

DEPS mentioned the rise in life insurance coverage take-up had resulted within the growth of the finance sub-sector.

In distinction, companies sub-sectors that struggled with earnings losses included eating places (-9.8%), wholesale and retail commerce (-4.2%), and water transport (-3.7%).

The companies sector contributed to 35.4% of Brunei’s GDP within the fourth quarter.

In the meantime, DEPS mentioned the agriculture, forestry and fishery sector had been exhibiting encouraging efficiency since Q2 2020.

In This autumn 2021, this sector elevated 6.1 % on the again of rising small-scale and industrial fishing actions in addition to a leap in sawn timber manufacturing.