Here you will find both summarised and detailed information regarding Brunei’s economy in 2017 and its general state of being. I have also included the most recent inflation rates based on Consumer Price Index (CPI) data. For further research please check the sources at the bottom of the post.
Brunei’s Economy 2017 at a glance
2017 was somewhat a good year for Brunei seeing GDP improvements over the slump in 2016 with an annual growth of 1.3%. Industry and Service sectors in particular saw considerable growth and contributed towards the overall GDP. We shall see if Brunei can use this momentum to attain higher GDP growths going forward. With economic diversification away from the oil and gas industry still the forefront of Brunei’s narrative, we can only wait to see if they will bear fruit.
Contents
- Introduction
- Background
- Overview
- Gross Domestic Product
- What is GDP?
- Brunei’s GDP Annual Growth Rate
- Inflation Rate
- What is inflation?
- Brunei Inflation Rate
- Labour
- Reference Sources
1. Introduction
Background
The Sultanate of Brunei Darussalam is a small, energy-rich country situated on the northern coast of the island of Borneo in Southeast Asia. It is a hot and humid tropical country which borders the South China Sea to the north, Malaysia to the east and west, and Indonesia to the south. Brunei boasts a well-educated, largely English-speaking population; excellent infrastructure; and a stable government intent on attracting foreign investment.
Crude oil and natural gas production account for approximately 65% of GDP and 95% of exports, with Japan as the primary export market. Per capita GDP is among the highest in the world, and substantial income from overseas investment supplements income from domestic hydrocarbon production.
Bruneian citizens do not pay personal income taxes, and the government provides free medical services and free education through the university level.
Overview
| Full name: | Brunei Darussalam |
| Capital: | Bandar Seri Begawan |
| Location: | Southeast Asia |
| Geographic coordinates: | 4 30 N, 114 40 E |
| Time zone: | GMT +8 |
| Land area: | 5,265 sq km |
| Government type: | Absolute Monarchy |
| Head of State: | Sultan Haji Hassanal Bolkiah Mu'izzaddin Waddaulah ibni Al-Marhum Sultan Haji Omar Ali Saifuddien Sa'adul Khairi Waddien |
| Population: | 417,200 (2015 est.) |
| Demographics: | Malay: 65.7% Chinese: 10.3% Others: 25.0% (2016 survey) |
| Official language: | Malay |
| Official religion: | Islam |
| Main exports: | Crude oil Liquified Natural Gas Organic Chemicals |
| Gross Domestic Product 2017: | BND18.38 billion |
| GDP Growth 2017: | 1.3% |
| GDP Growth Q1 year-on-year 2017: | -1.3% |
| GDP Growth Q2 year-on-year 2017: | 0.2% |
| GDP Growth Q3 year-on-year 2017: | 1.3% |
| GDP Growth Q4 year-on-year 2017: | 5.2% |
| Unemployment rate: | 6.9% (2014 survey) |
| Legal working age: | 16 years old |
2. Gross Domestic Product
i. What is GDP?
Gross Domestic Product (GDP) is the final value of the goods and services produced within the geographic boundaries of a country during a specified period of time, normally a year. GDP growth rate is an important indicator of the economic performance of a country.
ii. Brunei’s GDP Annual Growth Rate
In the last quarter of 2017 (Q4 2017) Brunei recorded a GDP growth rate of 5.2% year-on-year. Overall GDP for 2017 was recorded at 1.3%; at least an improvement after the economic slump in 2016. The annual GDP of Brunei was recorded at BND18.38 billion; a slight improvement from BND18.1 billion in 2016.
a. GDP from Agriculture, Forestry and Fishery
GDP growth rate for agricultural endeavours recorded at an annual -1.6%. Fishery had the biggest improvement which saw a growth of 0.9% up from -12.9% in 2016. The biggest contributor to the negative growth rate was from Forestry activities which fell to -24.5% from 0.9% in 2016.
Activities and their growth rates under this sector include:
| Activity | 2016 | 2017 |
|---|---|---|
| Vegetables, fruits & other agriculture | -1.6% | 7.8% |
| Livestock and poultry | 2.1% | -1.5% |
| Forestry | 8.5% | -24.5% |
| Fishery | -12.9% | 0.9% |
b. GDP from Industry
The Industry sector recovered quite significantly from 2016 with an annual recorded GDP of 1.5%. Following a shakey Q1, the most notable growths are the manufacture of LNG and methanol (9.7%), food and beverage (4.9%) and construction (9.3%).
The activities and growth rate of the industry sector are:
| Activity | 2016 | 2017 |
|---|---|---|
| Oil and gas mining | -3.6% | -1.4% |
| Manufacture of liquefied natural gas and methanol | -0.3% | 9.7% |
| Manufacture of wearing apparel & textiles | -2.3% | 0.9% |
| Manufacture of food and beverage products | -9.5% | 4.9% |
| Other manufacturing | -6.4% | -1.5% |
| Electricity and water | 4.8% | 3.6% |
| Construction | -6.6% | 9.3% |
c. GDP from Services
The Services sector also saw a growth of 1.1%. Growth in Water Transport (13.4%), Hotels (7.4%) and Business Services (1.8%) were the most significant compared to 2016. Education services, however, declined to -6.0%.
Activities and growth rates are for the services sector are:
| Activity | 2016 | 2017 |
|---|---|---|
| Wholesale and retail trade | -3.5% | 0.7% |
| Land transport | -10.0% | -2.0% |
| Water transport | -9.5% | 13.4% |
| Air transport | 0.9% | -0.7% |
| Other transport services | -15.2% | -4.1% |
| Communication | 3.5% | 0.9% |
| Finance | 9.6% | 1.5% |
| Real estate & ownership of dwellings | 1.9% | 2.7% |
| Hotels | -6.9% | 7.4% |
| Restaurants | -0.9% | 2.8% |
| Health services | -2.4% | 1.4% |
| Education services | -4.7% | -6.0% |
| Business services | -12.6% | 1.8% |
| Domestic services | 2.0% | 2.0% |
| Other private services | -7.8% | 2.2% |
| Government Services/Public Administration | -2.7% | 1.6% |
3. Inflation Rate
i. What is Inflation?
Inflation is defined as a sustained increase in the general level of prices for goods and services in a county, and is measured as an annual percentage change. So Consumer Price Index (CPI) can be used to correlate the buying power of the population. Generally speaking, inflation means your money can buy less things in the future than it can today. A negative inflation is referred to as a deflation.
ii. Brunei Inflation Rate
Consumer Prices in Brunei surged 0.2% year-on-year in June 2018. The cost of clothing declined by -4.5% due to lower prices of clothing materials, garments, accessories, tailoring charges and cleaning of clothing as well as shoes and other footwear. However, increase in prices are recorded particularly for:
- Food and non-alcohol beverage (1.9%) due to increase in prices for many foodstuffs.
- Health (2.5%) due to increase in prices of medicinal preparations and patent medicines.
- Education (1.8%) due to increase in fees of selected private school for pre-primary and primary education as well as secondary education.
| Consumer Price Items | Price difference Jun 2018 compared to Jun 2018 |
|---|---|
| Overall Index | 0.2% |
| Food And Non-Alcoholic Beverages | 1.9% |
| Clothing And Footwear | -4.5% |
| Housing, Water, Electricity, Gas And Other Fuels | -0.7% |
| Furnishings, Household Equipment And Routine Household Maintenance | -0.2% |
| Health | 2.5% |
| Transport | -1.0% |
| Communication | 1.0% |
| Recreation And Culture | -0.7% |
| Education | 1.8% |
| Restaurants And Hotels | 1.2% |
| Miscellaneous Goods And Services | 0.7% |
4. Labour
- The Labour Force Survey in 2014 found from the total working age population of 310,514, 6.9% were unemployed and about 12.5% of the working age population were underutilized.
- The majority of the nation’s workforce are employed as sales and service staff (19.5%) and professionals (17%). Public administration showed to be the biggest employer (26.2%).
- In March 2016, the number of unemployed persons in Brunei came to about 10,073, continuing the trend of declining unemployment. This is possibly due to government initiatives over the years to increase employability or possibly people who found employment outside of Brunei. Nevertheless, this would put Brunei unemployment rate at 3.2% but without an official survey, this value is speculating at best.
5. Reference Sources
Brunei Department of Economic Planning and Development
Consumer Price Index June 2018
International Monetary Fund Data and Statistics
Trading Economics Brunei Indicators
